[Federal Register Volume 59, Number 143 (Wednesday, July 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17974]
[[Page Unknown]]
[Federal Register: July 27, 1994]
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Part III
Department of Labor
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Office of the Secretary
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29 CFR Part 95
Uniform Administrative Requirements for Grants and Agreements With
Institutions of Higher Education, et cetera.; Final Rule
DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 95
Uniform Administrative Requirements for Grants and Agreements
With Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations, and With Commercial Organizations, Foreign Governments,
Organizations Under the Jurisdiction of Foreign Governments, and
International Organizations
AGENCY: Office of the Secretary, Labor.
ACTION: Final rule.
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SUMMARY: The Department of Labor is issuing these regulations pursuant
to the requirements of the Office of Management and Budget (OMB)
Circular No. A-110 (Revised), which provides standards for obtaining
consistency and uniformity among Federal agencies in the administration
of grants and agreements with institutions of higher education,
hospitals, and other non-profit organizations. This rule also applies
to the Department of Labor's grants to commercial organizations,
foreign governments, organizations under the jurisdiction of foreign
governments and international organizations.
OMB issued Circular A-110 in 1976 and, except for a minor revision
in February 1987, the Circular remained unchanged until revised in
1993. To update the Circular, OMB established an interagency task force
to review the Circular. The task force solicited suggestions for
changes to the Circular from university groups, non-profit
organizations and other interested parties and compared for consistency
the provisions of similar provisions applied to State and local
governments. The revised Circular and these regulations reflect the
results of these efforts.
EFFECTIVE DATE: This rule is effective on July 27, 1994.
ADDRESSES: U.S. Department of Labor, Office of the Assistant Secretary
for Administration and Management, Directorate of Administrative and
Procurement Programs, Room S-1522, 200 Constitution Ave., NW.,
Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Melvin Goldberg, Office of Acquisition
Integrity, Division of Procurement and Grant Policy. Telephone 202-219-
9174, Extension 109 (this is not a toll free number).
SUPPLEMENTARY INFORMATION:
A. Background
OMB published a notice in the Federal Register (57 FR 39018) on
August 27, 1992, requesting comments on proposed revisions to OMB
Circular A-110. Interested parties were invited to submit comments. OMB
received over 200 comments from Federal agencies, non-profit
organizations, professional organizations and others. All comments were
considered in developing this final revision.
On November 29, 1993, at 58 FR 62992, OMB published a notice
containing its final revision to Circular A-110. In that publication,
OMB presented a summary of the major comments, grouped by subject, and
a response to each comment. Other changes were made to increase clarity
and readability.
Omitted from part 95 are requirements which DOL must meet pursuant
to the Circular. Those requirements deal with the relationship between
DOL and OMB and are not necessary to this rulemaking. OMB Circular A-
110 gives Federal agencies the discretion to make these regulations
applicable to grants and agreements awarded to commercial
organizations, foreign governments, organizations under the
jurisdiction of foreign governments, and international organizations.
The Department of Labor has chosen to do so. As permitted by OMB
Circular A-110, the Department has made a few changes to the language
of the Circular to fit the particular circumstances of the DOL
programs. The Department has added a definition of ``commercial
organizations'' and revised the definition of ``program income'' for
clarification purposes. The Department also has revised the language in
Sec. 95.25(e)(2), dealing with extensions, for editorial purposes. The
Department has deleted the words ``at least'' from Sec. 95.22(e)(2) to
enhance administrative efficiency by limiting invoicing to once a
month. Other minor editorial, technical, and clarifying changes are
made as well.
B. Publication in Final
The Department of Labor has determined, pursuant to 5 U.S.C.
553(b)(B), that good cause exists for waiving public comment on this
procedural amendment to the regulation because such comment is
unnecessary, impracticable, and contrary to the public interest. This
finding is made because all executive agencies are required to follow
OMB directives with respect to grants or assistance of property. See 41
U.S.C. Sec. 405 (The Office of Federal Procurement Policy Act).
C. Dates
The Department has determined that good cause exists for waiving
the customary requirement for delay in the effective date of a final
rule for 30 days following its publication. Therefore, this rule shall
be effective July 27, 1994. See 5 U.S.C. 553.
D. Procedural Matters
This rule is not a ``significant regulatory action'' as defined by
section 3(f) of Executive Order 12866. Since this rule was not preceded
by a proposed rule, a regulatory flexibility analysis is not required.
See 5 U.S.C. 601(2). Further, the Department of Labor certifies that
the rule will not have a significant economic impact on a substantial
number of small entities, because it does not affect the amount of
funds provided in the covered programs, but, rather, modifies and
updates administrative and procedural requirements. The recordkeeping
requirements in this rule have been approved by the Office of
Management and Budget, as required by the Paperwork Reduction Act of
1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by
the Office of Management and Budget, Approval Number 1225-0017.
List of Subjects
29 CFR Part 95
Grants programs, Grants administration, Government contracts,
Reporting and record-keeping requirements.
For the reasons set out in the preamble, subtitle A of title 29 of
the Code of Federal Regulations is amended, by adding a new part 95, as
set forth below.
Signed at Washington, DC, this 18th day of July, 1994.
Cynthia A. Metzler,
Assistant Secretary for Administration and Management.
PART 95--GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER
EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS, AND WITH
COMMERCIAL ORGANIZATIONS, FOREIGN GOVERNMENTS, ORGANIZATIONS UNDER
THE JURISDICTION OF FOREIGN GOVERNMENTS, AND INTERNATIONAL
ORGANIZATIONS
Subpart A--General
Sec.
95.1 Purpose.
95.2 Definitions.
95.3 Effect on other issuances.
95.4 Deviations.
95.5 Subawards.
Subpart B--Pre-Award Requirements
95.10 Purpose.
95.11 Pre-award policies.
95.12 Forms for applying for Federal assistance.
95.13 Debarment and suspension.
95.14 Special award conditions.
95.15 Metric system of measurement.
95.16 Resource Conservation and Recovery Act.
95.17 Certifications and representations.
Subpart C--Post-Award Requirements
Financial and Program Management
95.20 Purpose of financial and program management.
95.21 Standards for financial management systems.
95.22 Payment.
95.23 Cost sharing or matching.
95.24 Program income.
95.25 Revision of budget and program plans.
95.26 Non-Federal audits.
95.27 Allowable costs.
95.28 Period of availability of funds.
Property Standards
95.30 Purpose of property standards.
95.31 Insurance coverage.
95.32 Real property.
95.33 Federally-owned and exempt property.
95.34 Equipment.
95.35 Supplies and other expendable property.
95.36 Intangible property.
95.37 Property trust relationship.
Procurement Standards
95.40 Purpose of procurement standards.
95.41 Recipient responsibilities.
95.42 Codes of conduct.
95.43 Competition.
95.44 Procurement procedures.
95.45 Cost and price analysis.
95.46 Procurement records.
95.47 Contract administration.
95.48 Contract provisions.
Reports and Records
95.50 Purpose of reports and records.
95.51 Monitoring and reporting program performance.
95.52 Financial reporting.
95.53 Retention and access requirements for records.
Termination and Enforcement
95.60 Purpose of termination and enforcement.
95.61 Termination.
95.62 Enforcement.
Subpart D--After-the-Award Requirements
95.70 Purpose.
95.71 Closeout procedures.
95.72 Subsequent adjustments and continuing responsibilities.
95.73 Collection of amounts due.
Appendix A to Part 95--Contract Provisions
Authority: 5 U.S.C. 301; OMB Circular A-110; Secretary of
Labor's Order 4-76.
Subpart A--General
Sec. 95.1 Purpose.
This part establishes uniform administrative requirements for
Federal grants and agreements awarded to institutions of higher
education, hospitals, other non-profit organizations, commercial
organizations, foreign governments, organizations under the
jurisdiction of foreign governments, and international organizations.
DOL shall not impose additional or inconsistent requirements, except as
provided in Secs. 95.4 and 95.14 or unless specifically required by
Federal statute or executive order. Non-profit and commercial
organizations that implement Federal programs for the States are also
subject to State requirements.
Sec. 95.2 Definitions.
(a) Accrued expenditures means 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.
(b) Accrued income means 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, and
(2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
(c) Acquisition cost of equipment means 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.
(d) Advance means 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.
(e) Award means 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
DOL 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.
(f) Cash contributions means the recipient's cash outlay, including
the outlay of money contributed to the recipient by third parties.
(g) Closeout means the process by which DOL determines that all
applicable administrative actions and all required work of the award
have been completed by the recipient and DOL.
(h) Commercial organization means any business entity organized
primarily for profit (even if its ownership is in the hands of a
nonprofit entity) with a place of business located in or outside the
United States. The term includes, but is not limited to, an individual,
partnership, corporation, joint venture, association, or cooperative.
(i) Contract means a procurement contract under an award or
subaward, and a procurement subcontract under a recipient's or
subrecipient's contract.
(j) Cost sharing or matching means that portion of project or
program costs not borne by DOL.
(k) Date of completion means 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 DOL sponsorship ends.
(l) Disallowed costs means those charges to an award that DOL
determines to be unallowable, in accordance with the applicable Federal
cost principles or other terms and conditions contained in the award.
(m) DOL means the U.S. Department of Labor, including its agencies
and organizational units.
(n) Equipment means 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. Equipment includes, but is not limited to, equipment
acquired before the publication of these regulations and equipment
transferred from prior years.
(o) Excess property means property under the control of DOL that,
as determined by the Secretary of Labor, is no longer required for its
needs or the discharge of its responsibilities.
(p) Exempt property means tangible personal property acquired in
whole or in part with Federal funds, where DOL has statutory authority
to vest title in the recipient without further obligation to the
Federal Government.
(q) Federal 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.
(r) Federal awarding grantor agency means the Federal agency that
provides an award to the recipient.
(s) Federal funds authorized means the total amount of Federal
funds obligated by DOL for use by the recipient. This amount may
include any authorized carryover of unobligated funds from prior
funding periods when permitted by DOL's regulations or DOL's
implementing instructions.
(t) Federal share of real property, equipment, or supplies means
that percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
(u) Funding period means the period of time when Federal funding is
available for obligation by the recipient.
(v) Grant officer means any person authorized to enter into, modify
or terminate any financial assistance awards and make related
determinations and findings. DOL grant officers shall be designated by
name on a ``Certificate of Appointment.''
(w) Intangible property and debt instruments means, 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.
(x) Obligations means 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.
(y) Outlays or expenditures means 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.
(z) Personal property means 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.
(aa) Prior approval means written approval by an authorized
official evidencing prior consent.
(bb) Program income means 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. 95.24(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 Federal awarding agency 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.
(cc) Project costs means 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.
(dd) Project period means the period established in the award
document during which Federal sponsorship begins and ends.
(ee) Property means, unless otherwise stated, real property,
equipment, intangible property and debt instruments.
(ff) Real property means land, including land improvements,
structures and appurtenances thereto, but excludes movable machinery
and equipment. Real property includes, but is not limited to, real
property acquired before publication of these regulations and real
property transferred from prior years.
(gg) Recipient means an organization receiving financial assistance
directly from DOL 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 commercial organizations, foreign or international
organizations (such as agencies of the United Nations) which are
recipients, subrecipients, or contractors or subcontractors of
recipients or subrecipients. 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.
(hh) Research and development means 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.
(ii) Small awards means a grant or cooperative agreement not
exceeding the small purchase threshold fixed at 41 U.S.C. Sec. 403(11)
(currently $25,000).
(jj) Subaward means 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 paragraph (e) of this section.
(kk) Subrecipient means the legal entity to which a subaward is
made and which is accountable to the recipient for the use of the funds
provided. The term includes foreign organizations and international
organizations (such as agencies of the United Nations).
(ll) Supplies means 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.''
(mm) Suspension means an action by DOL that temporarily withdraws
Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award by the Federal
awarding agency. Suspension of an award is a separate action from
suspension under DOL's regulations at 29 CFR part 98, implementing
E.O.'s 12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part
98, subpart D.
(nn) Termination means the cancellation of Federal sponsorship, in
whole or in part, under an agreement at any time prior to the date of
completion.
(oo) Third party in-kind contributions means 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 other expendable property, and the value of goods and
services directly benefiting and specifically identifiable to the
project or program.
(pp) Unliquidated obligations, for financial reports prepared on a
cash basis, means the amount of obligations incurred by the recipient
that have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the
recipient for which an outlay has not been recorded.
(qq) Unobligated balance means the portion of the funds authorized
by DOL that has not been obligated by the recipient and is determined
by deducting the cumulative obligations from the cumulative funds
authorized.
(rr) Unrecovered indirect cost means the difference between the
amount awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
(ss) Working capital advance means a procedure whereby funds are
advanced to the recipient to cover its estimated disbursement needs for
a given initial period.
Sec. 95.3 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. 95.4.
Sec. 95.4 Deviations.
The Office of Management and Budget (OMB) may grant exceptions for
classes of grants or recipients subject to the requirements of this
part when exceptions are not prohibited by statute. However, in the
interest of maximum grant-wide uniformity, exceptions from the
requirements of this part shall be permitted only in unusual
circumstances. DOL may apply more restrictive requirements to a class
of recipients when approved by OMB. DOL may apply less restrictive
requirements when awarding small awards, except for those requirements
which are statutory. Exceptions on a case-by-case basis may also be
made by DOL.
Sec. 95.5 Subawards.
Unless sections of this part specifically exclude subrecipients
from coverage, the provisions of this part shall be applied to
subrecipients performing work under awards if such subrecipients are
institutions of higher education, hospitals, other non-profit
organizations, commercial organizations, foreign governments,
organizations under the jurisdiction of foreign governments, and
international organizations. State and local government subrecipients
are subject to the provisions of regulations implementing the grants
management common rule, ``Uniform Administrative Requirements for
Grants and Cooperative Agreements to State and Local Governments,'' and
codified by DOL at 29 CFR part 97 or its successor.
Subpart B--Pre-Award Requirements
Sec. 95.10 Purpose.
Sections 95.11 through 95.17 prescribe forms and instructions and
other pre-award matters to be used in applying for Federal awards.
Sec. 95.11 Pre-award policies.
Public Notice and Priority Setting. Federal awarding agencies shall
notify the public of its intended funding priorities for discretionary
grant programs, unless funding priorities are established by Federal
statute.
Sec. 95.12 Forms for applying for Federal assistance.
(a) Applicants shall use the SF-424 series or those forms and
instructions prescribed by DOL.
(b) 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 DOL 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.
Sec. 95.13 Debarment and suspension.
Recipients shall comply with the nonprocurement debarment and
suspension common rule implementing E.O.'s 12549 and 12689, ``Debarment
and Suspension'' codified by DOL at 29 CFR part 98. This common rule
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. 95.14 Special award conditions.
If an applicant or recipient:
(a) Has a history of poor performance,
(b) Is not financially stable,
(c) Has a management system that does not meet the standards
prescribed in this part,
(d) Has not conformed to the terms and conditions of a previous
award, or
(e) Is not otherwise responsible,
DOL may impose additional requirements as needed, provided that such
applicant or recipient is notified in writing as to: The nature of the
additional requirements, the reason why the additional requirements are
being imposed, the nature of the corrective action needed, the time
allowed for completing the corrective actions, and the method for
requesting reconsideration of the additional requirements imposed. Any
special conditions shall be promptly removed once the conditions that
prompted them have been corrected.
Sec. 95.15 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. The Act
requires each Federal agency to establish a date or dates in
consultation with the Secretary of Commerce, when the metric system of
measurement will be used in the agency's procurements, grants, and
other business-related activities. Metric implementation may take
longer where the use of the system is initially impractical or likely
to cause significant inefficiencies in the accomplishment of federally-
funded activities. DOL shall follow the provisions of E.O. 12770,
``Metric Usage in Federal Government Programs.''
Sec. 95.16 Resource Conservation and Recovery Act.
Under the Resource Conservation and Recovery Act (RCRA) (Pub. L.
94-580 codified at 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
recycled products pursuant to the EPA guidelines.
Sec. 95.17 Certifications and representations.
Unless prohibited by statute or codified regulation, DOL requires
recipients to submit certifications and representations required by
statute, executive order, or regulation on an annual basis only, if the
recipients have ongoing and continuing relationships with the agency.
Annual certifications and representations shall be signed by
responsible officials with the authority to ensure recipients'
compliance with the pertinent requirements.
Subpart C--Post-Award Requirements
Financial and Program Management
Sec. 95.20 Purpose of financial and program management.
Sections 95.21 through 95.28 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.
Sec. 95.21 Standards for financial management systems.
(a) Recipients shall relate financial data to performance data and
develop unit cost information whenever practical.
(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. 95.52. Though DOL
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.
(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 shall 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 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, DOL, 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) DOL 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. 95.22 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 CMIA agreements or default
procedures codified at 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
(2) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 95.21.
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 DOL 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 are authorized to submit requests for advances
monthly when electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted
on SF-270, ``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 precluded by special
DOL instructions for electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. DOL 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, DOL shall make payment
within 30 days after receipt of the billing, unless the billing is
improper.
(2) Recipients are authorized to submit requests for reimbursement
monthly when electronic funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments
and DOL has determined that reimbursement is not feasible because the
recipient lacks sufficient working capital, DOL may provide cash on a
working capital advance basis. Under this procedure, DOL shall advance
cash to the recipient to cover its estimated disbursement needs for an
initial period generally geared to the awardee's disbursing cycle.
Thereafter, DOL shall reimburse 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, DOL shall not withhold
payments for proper charges made by recipients at any time during the
project period unless paragraphs (h)(1) or (h)(2) of this section
apply.
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements.
(2) The recipient or subrecipient is delinquent in a debt to the
United States as defined in OMB Circular A-129, ``Managing Federal
Credit Programs.'' Under such conditions, DOL 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 the Federal Government is liquidated.
(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, DOL 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 paragraph (k)(1), (k)(2), or (k)(3) of this
section apply.
(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.
(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.
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 FEDWIRE Deposit system.
Recipients who do not have this capability should use a check.
(l) For those entities where CMIA and its implementing regulations
do not apply, interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, P.O. Box 6021, Rockville, MD
20852. Interest amounts up to $250 per year may be retained by the
recipient for administrative expense. State universities and hospitals
shall comply with CMIA, as it pertains to interest. If an entity
subject to CMIA uses its own funds to pay pre-award costs for
discretionary awards without prior written approval from DOL, it waives
its right to recover the interest under CMIA.
(m) Except as noted elsewhere in this part, only the following
forms shall be authorized for the recipients in requesting advances and
reimbursements. DOL shall not require more than an original and two
copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. The SF-270 is the
standard form for all nonconstruction programs when electronic funds
transfer or predetermined advance methods are not used. DOL, however,
has the option of using this form for construction programs in lieu of
the SF-271, ``Outlay Report and Request for Reimbursement for
Construction Programs.''
(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. The SF-271 is the standard form to be used for
requesting reimbursement for construction programs. However, DOL may
substitute the SF-270 when DOL determines that it provides adequate
information to meet Federal needs.
Sec. 95.23 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 where authorized by Federal statute to be used for cost sharing
or matching.
(6) Are provided for in the approved budget when required by DOL.
(7) Conform to other provisions of this part, as applicable.
(b) Unrecovered indirect costs may be included as part of cost
sharing or matching only with prior written approval of the grant
officer.
(c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If DOL 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 the value determined under paragraph (c)(1) or paragraph
(c)(2) of this section.
(1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation.
(2) The current fair market value. However, when there is
sufficient justification, the grant officer 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.
(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 expendable
equipment, 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
paragraph (g)(1) or (g)(2) of this section apply.
(1) If the purpose of the award is to 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.
(2) If the purpose of the award is to 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 grant officer
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.
(4) The value of loaned equipment shall not exceed its fair rental
value.
(5) The following requirements pertain to the recipient's
supporting records for in-kind contributions from third parties:
(i) Volunteer services shall be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(ii) The basis for determining the valuation for personal service,
material, equipment, buildings and land shall be documented.
Sec. 95.24 Program income.
(a) Except as provided in paragraph (e) of this section, program
income earned during the project period shall be retained by the
recipient and added to funds committed to the project by DOL and
recipient, and used to further eligible project or program objectives.
(b) Recipients shall have no obligation to the Federal Government
regarding program income earned after the end of the project period.
(c) 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.
(d) Proceeds from the sale of property are not program income and
shall be handled in accordance with the requirements of the Property
Standards (See Secs. 95.30 through 95.37).
(e) Unless DOL's 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.
However, Patent and Trademark Amendments (35 U.S.C. 18) apply to
inventions made under an experimental, developmental, or research
award.
Sec. 95.25 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
Federal and non-Federal share, or only the Federal share, depending
upon DOL's 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
written approvals from the grant officer for one or more of the
following program or budget changes:
(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).
(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.
(6) The inclusion, unless waived by the grant officer, of costs
that require prior approval in accordance with OMB Circular A-21,
``Cost Principles for Institutions of Higher Education,'' OMB Circular
A 122, ``Cost Principles for Non-Profit Organizations,'' or 45 CFR part
74, Appendix E, ``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.
(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.
(d) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1) and (c)(4)
of this section, the grant officer may waive cost-related and
administrative prior written approvals required by this part and OMB
Circulars A-21 and A-122. Such waivers may include authorizing
recipients to do any one or more of the following:
(1) Incur pre-award costs 90 calendar days prior to award or more
than 90 calendar days with the prior written approval of the grant
officer. All pre-award costs are incurred at the recipient's risk
(i.e., the grant officer 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).
(2) Initiate a one-time extension of the expiration date of the
award of up to 12 months unless one or more of the following conditions
apply. For one-time extensions, the recipient must notify the grant
officer in writing with the supporting reasons and revised expiration
date at least 10 days before the expiration date specified in the
award. This one-time extension may not be exercised merely for the
purpose of using unobligated balances. The one-time extension may not
be initiated if:
(i) The terms and conditions of award prohibit the extension.
(ii) The extension requires additional Federal funds.
(iii) The extension involves any change in the approved objectives
or scope of the project.
(3) Carry forward unobligated balances to subsequent funding
periods.
(4) For awards that support research, unless the grant officer
provides otherwise in the award or in DOL's regulations, the prior
written approval requirements described in paragraph (e) are
automatically waived (i.e., recipients need not obtain such prior
written approvals) unless one of the conditions included in paragraph
(e)(2) applies.
(f) DOL may, at its option, restrict the transfer of funds among
direct cost categories or programs, 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 DOL. DOL shall not
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.
(g) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j), do not require prior approval.
(h) For construction awards, recipients shall request prior written
approval promptly from the grant officer for budget revisions whenever
paragraphs (h)(1), (h)(2) or (h)(3) of this section apply.
(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.
(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. 95.27.
(i) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
(j) When DOL makes an award that provides support for both
construction and nonconstruction work, DOL may require the recipient to
request prior written approval before making any fund or budget
transfers between the two types of work supported.
(k) For both construction and nonconstruction awards, recipients
shall notify the grant 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 $5,000 or five percent of
the award, whichever is greater. This notification shall not be
required if an application for additional funding is submitted for a
continuation award.
(l) When requesting written approval for budget revisions,
recipients shall use the budget forms that were used in the
application.
(m) Within 30 calendar days from the date of receipt of the request
for budget revisions, the grant 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 grant officer shall inform the recipient in writing of the
date when the recipient may expect the decision.
Sec. 95.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations shall be subject to the
audit requirements contained in OMB Circular A-133, ``Audits of
Institutions of Higher Education and Other Non-Profit Institutions''
and applicable provisions of DOL regulations at 29 CFR part 96.
(b) Recipients and subrecipients that are State and local
governments shall be subject to the audit requirements contained in the
Single Audit Act (31 U.S.C. 7501-7) and DOL's regulations implementing
OMB Circular A-128, ``Audits of State and Local Governments'' and
applicable provisions of DOL regulations at 29 CFR part 96.
(c) Hospitals not covered by the audit provisions of OMB Circular
A-133 shall be subject to the audit requirements of DOL. See 29 CFR
part 96.
(d) Commercial organizations shall be subject to the audit
requirements specified by the DOL awarding agency or the prime
recipient as incorporated into the award document. See 29 CFR part 96.
Sec. 95.27 Allowable costs.
For each kind of recipient, there is a set of Federal principles
for determining allowable costs. Allowability of costs shall be
determined in accordance with the cost principles applicable to the
entity incurring the costs. Thus, allowability of costs incurred by
State, local or federally-recognized Indian tribal governments is
determined in accordance with the provisions of OMB Circular A-87,
``Cost Principles for State and Local Governments.'' The allowability
of costs incurred by non-profit organizations is determined in
accordance with the provisions of OMB Circular A-122, ``Cost Principles
for Non-Profit Organizations.'' The allowability of costs incurred by
institutions of higher education is determined in accordance with the
provisions of OMB Circular A-21, ``Cost Principles for Educational
Institutions.'' The allowability of costs incurred by hospitals is
determined in accordance with the provisions of Appendix E of 45 CFR
part 74, ``Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals.'' The
allowability of costs incurred by commercial organizations and those
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.
Sec. 95.28 Period of availability of funds.
Where a funding period is specified, a recipient may charge to the
grant only allowable costs resulting from obligations incurred during
the funding period and any pre-award costs authorized by DOL.
Property Standards
Sec. 95.30 Purpose of property standards.
Sections 95.31 through 95.37 set forth uniform standards governing
management and disposition of property furnished by the Federal
Government whose cost was charged to a project supported by a Federal
award. Recipients are required to observe these standards under awards
and no additional requirements shall be imposed, unless specifically
required by Federal statute. The recipient may use its own property
management standards and procedures provided it observes the provisions
of Secs. 95.31 through 95.37.
Sec. 95.31 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. 95.32 Real property.
DOL shall prescribe requirements for recipients concerning the use
and disposition of real property acquired in whole or in part under
awards. 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 DOL.
(b) The recipient shall obtain prior written approval from the
grant 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
shall be limited to those under federally-sponsored projects (i.e.,
awards) or programs that have purposes consistent with those authorized
for support by DOL.
(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 grant officer. The grant officer
shall issue 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 DOL and pay DOL 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. 95.33 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 DOL. Upon completion of
the award or when the property is no longer needed, the recipient shall
report the property to DOL for further Federal agency utilization.
(2) If DOL has no further need for the property, it shall be
declared excess and reported to the General Services Administration,
unless DOL has statutory authority to dispose of the property by
alternative methods (e.g., the authority provided by the Federal
Technology Transfer Act (15 U.S.C. 3710(i)) to donate research
equipment to educational and non-profit organizations in accordance
with E.O. 12821, ``Improving Mathematics and Science Education in
Support of the National Education Goals.'') Appropriate instructions
shall be issued to the recipient by DOL.
(b) Exempt property.
When statutory authority exists, DOL has the option to vest title
to property acquired with Federal funds in the recipient without
further obligation to the Federal Government and under conditions DOL
considers appropriate. Such property is ``exempt property.'' Should DOL
not establish conditions, title to exempt property upon acquisition
shall vest in the recipient without further obligation to the Federal
Government.
Sec. 95.34 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 grant officer. 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) Activities sponsored by the DOL agency which funded the
original project, then
(2) Activities sponsored by other Federal awarding 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 DOL
agency that financed the equipment; second preference shall be given to
projects or programs sponsored by other Federal awarding agencies. If
the equipment is owned by the Federal Government, use on other
activities not sponsored by the Federal Government shall be permissible
if authorized by the grant officer. 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 written approval of the grant officer.
(f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned equipment shall include
all of the following:
(1) Equipment records shall be maintained accurately and shall
include the following information:
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal
Government.
(v) Acquisition date (or date received, if the equipment 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
equipment furnished by the Federal Government).
(vii) Location and condition of the equipment 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 DOL for its share.
(2) Equipment owned by the Federal Government shall be identified
to indicate Federal ownership.
(3) A physical inventory of equipment 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.
(4) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment. Any
loss, damage, or theft of equipment shall be investigated and fully
documented; if the equipment was owned by the Federal Government, the
recipient shall promptly notify the grant officer.
(5) Adequate maintenance procedures shall be implemented to keep
the equipment 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. 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 original DOL agency. 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. If the recipient has no
need for the equipment, the recipient shall request disposition
instructions from DOL. The DOL agency shall determine whether the
equipment can be used to meet the agency's requirements. If no
requirement exists within the DOL agency, the availability of the
equipment shall be reported to the General Services Administration by
DOL to determine whether a requirement for the equipment exists in
other Federal agencies. DOL shall issue instructions to the recipient
no later than 120 calendar days after the recipient's request and the
following procedures shall govern.
(1) 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 DOL 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.
(2) 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.
(3) If the recipient is instructed to otherwise dispose of the
equipment, the recipient shall be reimbursed by the awarding agency for
such costs incurred in its disposition.
(4) The DOL agency reserves 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:
(i) The equipment shall be appropriately identified in the award or
otherwise made known to the recipient in writing.
(ii) The DOL agency shall issue disposition instructions within 120
calendar days after receipt of a final inventory. The final inventory
shall list all equipment acquired with grant funds and federally-owned
equipment. If DOL fails to issue disposition instructions within the
120 calendar day period, the recipient shall apply the standards of
this section, as appropriate.
(iii) When DOL exercises its right to take title, the equipment
shall be subject to the provisions for federally-owned equipment.
Sec. 95.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property 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. 95.36 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. DOL reserves 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 government-wide 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) DOL has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under an award.
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d) Title to intangible property and debt instruments acquired
under an 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
written approval of the grant officer. When no longer needed for the
originally authorized purpose, disposition of the intangible property
shall occur in accordance with the provisions of Sec. 95.34(g).
Sec. 95.37 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. Grant
officers 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. 95.40 Purpose of procurement standards.
Sections 95.41 through 95.48 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. No additional procurement standards or
requirements shall be imposed by DOL upon recipients, unless
specifically required by Federal statute or executive order or approved
by OMB.
Sec. 95.41 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 DOL, 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. 95.42 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 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. 95.43 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. 95.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures.
These procedures shall provide for, at a minimum, that paragraphs
(a)(1), (a)(2), and (a)(3) of this section apply.
(1) Recipients shall avoid purchasing unnecessary items.
(2) Where appropriate, an analysis shall be made of lease and
purchase alternatives to determine which would be the most economical
and practical procurement for the Federal Government.
(3) Solicitations for goods and services shall 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 for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration, the Department of
Commerce's Minority Business Development Agency, and DOL's Office of
Small Business and Minority Affairs 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 agencies' implementation of E.O.'s
12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part 98.
(e) Recipients shall, on request, make available to DOL, pre-award
and 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 small purchase
threshold fixed at 41 U.S.C. 403(11) (currently $25,000) 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 small purchase
threshold, specifies a ``brand name'' product.
(4) The proposed award over the small purchase 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 small purchase threshold.
Sec. 95.45 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. 95.46 Procurement records.
Procurement records and files for purchases in excess of the small
purchase 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. 95.47 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. 95.48 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:
(a) Contracts in excess of the small purchase 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 small purchase 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, DOL may accept
the bonding policy and requirements of the recipient, provided DOL 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 herein,
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 small
purchase threshold) awarded by recipients shall include a provision to
the effect that the recipient, DOL, 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 small purchases, awarded by recipients
and their contractors shall contain the procurement provisions of
Appendix A to this part, as applicable.
Reports and Records
Sec. 95.50 Purpose of reports and records.
Sections 95.51 through 95.53 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. 95.51 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. 95.26.
(b) DOL shall prescribe the frequency with which 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 grant year; quarterly or semi-annual
reports shall be due 30 days after the reporting period. DOL 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.
(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 DOL 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) DOL may make site visits, as needed.
(h) DOL shall comply with clearance requirements of 5 CFR part 1320
when requesting performance data from recipients.
(Approved by the Office of Management and Budget, Approval Number
1225-0017)
Sec. 95.52 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 or SF-269A, Financial Status Report.
(i) Recipients shall use the SF-269, SF-269A, or other OMB-
approved forms to report the status of funds for all nonconstruction
projects or programs. DOL 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, Report of Federal Cash Transactions, is
determined to provide adequate information to meet its 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.
(ii) DOL shall prescribe whether the report shall be on a cash or
an accrual basis. If DOL requires accrual information and the
recipient's accounting records are not normally kept on the accrual
basis, the recipient shall not convert its accounting system, but shall
develop such accrual information through best estimates based on an
analysis of the documentation on hand.
(iii) DOL 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
agreement.
(iv) Recipients shall submit to DOL the SF-269, SF-269A, or other
OMB-approved forms (an original and no more than two copies) no later
than 30 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 DOL
upon request of the recipient.
(2) SF-272, Report of Federal Cash Transactions.
(i) When funds are advanced to recipients, the recipient shall
submit the SF-272 and, when necessary, its continuation sheet, SF-272a.
DOL shall use this report to monitor cash advanced to recipients and to
obtain disbursement information for each agreement with the recipients.
(ii) DOL may require forecasts of Federal cash requirements in the
``Remarks'' section of the report.
(iii) When practical and deemed necessary, DOL may require
recipients to report in the ``Remarks'' section the amount of cash
advances received in excess of three days. Recipients shall provide
short narrative explanations of actions taken to reduce the excess
balances.
(iv) Recipients shall submit not more than the original and two
copies of the SF-272 15 calendar days following the end of each
quarter. The DOL agency may require a monthly report from those
recipients receiving advances totaling $1 million or more per year.
(v) DOL 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 DOL's opinion, the recipient's accounting controls are
adequate to minimize excessive Federal advances; or,
(C) When the electronic payment mechanisms provide adequate data.
(b) When DOL needs additional information or more frequent reports,
the following shall be observed.
(1) When additional information is needed to comply with
legislative requirements, DOL shall issue instructions to require
recipients to submit such information under the ``Remarks'' section of
the reports.
(2) When DOL determines that a recipient's accounting system does
not meet the standards in Sec. 95.21, 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. DOL,
in obtaining this information, shall comply with report clearance
requirements of 5 CFR part 1320.
(3) DOL may shade out any line item on any report if not necessary.
(4) DOL may accept the identical information from the recipients in
machine readable format or computer printouts or electronic outputs in
lieu of prescribed formats.
(5) DOL may provide computer or electronic outputs to recipients
when such expedites or contributes to the accuracy of reporting.
(Approved by the Office of Management and Budget, Approval Number 1225-
0017)
Sec. 95.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and
access to records for awards to recipients. DOL 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 or, for awards that are renewed quarterly or
annually, from the date of the submission of the quarterly or annual
financial report, as authorized by DOL. 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 DOL, the 3-
year retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, etc., as
specified in paragraph (g) of this section.
(c) Copies of original records may be substituted for the original
records if authorized by DOL.
(d) DOL shall request transfer of certain records to its custody
from recipients when it determines that the records possess long term
retention value. However, in order to avoid duplicate recordkeeping,
DOL may make arrangements for recipients to retain any records that are
continuously needed for joint use.
(e) The Federal grantor awarding agency, the Inspector General, the
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, DOL shall not place restrictions on
recipients that limit public access to the records of recipients that
are pertinent to an award, except when DOL 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.
Sec. 552) if the records had belonged to DOL.
(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 to DOL
or the subrecipient submits to the recipient the proposal, plan, or
other computation to form the basis for negotiation of the rate, 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 DOL 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.
(Approved by the Office of Management and Budget, Approval Number 1225-
0017)
Termination and Enforcement
Sec. 95.60 Purpose of termination and enforcement.
Sections 95.61 and 95.62 set forth uniform suspension, termination
and enforcement procedures.
Sec. 95.61 Termination.
(a) Awards may be terminated in whole or in part only if paragraphs
(a) (1), (a)(2), or (a)(3) of this section apply.
(1) By grant officers, if a recipient materially fails to comply
with the terms and conditions of an award.
(2) By grant officers, 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.
(3) By the recipient upon sending to the grant 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. However, if the grant officer determines in the case of
partial termination that the reduced or modified portion of the grant
will not accomplish the purposes for which the grant was made, the
grant officer may terminate the grant in its entirety under either
paragraphs (a) (1) or (2) of this section.
(b) If costs are allowed under an award, the responsibilities of
the recipient referred to in Sec. 95.71(a), 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. 95.62 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, DOL may, in addition to imposing any of the special conditions
outlined in Sec. 95.14, 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 DOL.
(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, DOL
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.
(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
DOL 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 paragraphs (c)(1) and (c)(2) of this section apply.
(1) The costs 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.
(2) The costs 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 E.O.'s 12549 and 12689 and DOL's
implementing regulations. See Sec. 95.13 and 29 CFR part 98.
Subpart D--After-the-Award Requirements
Sec. 95.70 Purpose.
Sections 95.71 through 95.73 contain closeout procedures and other
procedures for subsequent disallowances and adjustments.
Sec. 95.71 Closeout procedures.
(a) Recipients shall submit, within 90 calendar days after the date
of completion of the award, all financial, performance, and other
reports as required by the terms and conditions of the award. DOL may
approve extensions when requested by the recipient.
(b) Unless DOL 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) DOL shall make prompt 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 DOL has advanced or paid and that is not authorized to be
retained by the recipient for use in other projects. OMB Circular A-129
governs unreturned amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, DOL
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. 95.31 through 95.37.
(g) In the event a final audit has not been performed prior to the
closeout of an award, DOL retains the right to recover an appropriate
amount after fully considering the recommendations on disallowed costs
resulting from the final audit.
Sec. 95.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following:
(1) The right of DOL 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. 95.26.
(4) Property management requirements in Secs. 95.31 through 95.37.
(5) Records retention as required in Sec. 95.53.
(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
DOL and the recipient, provided the responsibilities of the recipient
referred to in Sec. 95.73(a), including those for property management
as applicable, are considered and provisions made for continuing
responsibilities of the recipient, as appropriate.
Sec. 95.73 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. If
not paid within a reasonable period after the demand for payment, DOL
may reduce the debt by paragraphs (a)(1), (a)(2), or (a)(3) of this
section.
(1) Making an administrative offset against other requests for
reimbursements.
(2) Withholding advance payments otherwise due to the recipient.
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, DOL shall charge interest
on an overdue debt in accordance with 4 CFR Chapter II, ``Federal
Claims Collection Standards.''
Appendix A to Part 95--Contract Provisions
All contracts, awarded by a recipient including small purchases,
shall contain the following provisions as applicable:
1. Equal Employment Opportunity--All contracts shall contain a
provision requiring compliance with E.O. 11246, ``Equal Employment
Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order
11246 Relating to Equal Employment Opportunity,'' and as
supplemented by regulations at 41 CFR part 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 subgrants 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. Sec. 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 one is otherwise entitled. The
recipient shall report all suspected or reported violations to the
Federal awarding agency.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When
required by Federal program legislation, all construction contracts
awarded by the recipients and subrecipients of more than $2000 shall
include a provision for compliance with the Davis-Bacon Act (40
U.S.C. Sec. 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.
Sec. 327-333)--Where applicable, all contracts awarded by recipients
in excess of $2,000 for construction contracts and in excess of
$2,500 for other contracts 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. Sec. 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 or Agreement--
Contracts or 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 and Small Business Firms Under Government
Grants, Contracts and Cooperative Agreements,'' and any implementing
regulations issued by the awarding agency.
6. Clean Air Act (42 U.S.C. Sec. 7401 et seq.) and the Federal
Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.), as
amended--Contracts and subgrants 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. Sec. 7401 et seq.) and the
Federal Water Pollution Control Act as amended (33 U.S.C. Sec. 1251
et seq.). Violations shall be reported to the Federal awarding
agency and the Regional Office of the Environmental Protection
Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C. Sec. 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. Sec. 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. See 29 CFR part 98.
8. Debarment and Suspension (E.O.'s 12549 and 12689)--No
contract shall be made to parties listed on the General Services
Administration's List of Parties Excluded from Federal Procurement
or Nonprocurement Programs in accordance with E.O.'s 12549 and
12689, ``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 small purchase threshold shall provide the required
certification regarding its exclusion status and that of its
principal employees.
[FR Doc. 94-17974 Filed 7-26-94; 8:45 am]
BILLING CODE 4510-23-P