[Federal Register Volume 69, Number 250 (Thursday, December 30, 2004)]
[Pages 78389-78396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28635]



[Docket No. 010925233-4337-03]

Department of Commerce Pre-Award Notification Requirements for 
Grants and Cooperative Agreements

AGENCY: Department of Commerce (DOC).

ACTION: Notice.


SUMMARY: This notice revises and updates the Department of Commerce 
(DOC) Pre-Award Notification Requirements for Grants and Cooperative 
Agreements published in the Federal Register (66 FR 49917) on October 
1, 2001, as amended on October 30, 2002 (67 FR 66109), which pertain to 
information provided to applicants for funding under grants and 
cooperative agreements awarded by the DOC. This announcement 
constitutes a recompilation of the notice with all amendments and 
revisions to date.

DATES: These provisions are effective December 30, 2004.

FOR FURTHER INFORMATION CONTACT: Gary Johnson, Office of Acquisition 
Management, Telephone Number--202-482-1679.

SUPPLEMENTARY INFORMATION: The DOC is authorized to award grants and 
cooperative agreements under a wide

[[Page 78390]]

range of programs that support economic development; international 
trade; minority businesses; standards and technology; oceanic/
atmospheric services; and telecommunications and information.
    It is the policy of DOC to seek full and open competition for award 
of discretionary financial assistance funds. Moreover, DOC financial 
assistance must be awarded through a merit-based review and selection 
process whenever possible. Notices announcing the availability of 
Federal funds for each DOC competitive financial assistance program 
with funds available for new awards will be published by the sponsoring 
operating unit in the Federal Register and posted on the Grant.gov Web 
site in the uniform format for announcements of funding opportunities 
mandated by the Office of Management and Budget (OMB). These 
announcements will reference or include the DOC Pre-Award Notification 
Requirements identified in Sections A and B of this notice, and will 
include program-specific information as identified in Section C of this 
notice and will follow the uniform format for announcements of funding 
opportunities as identified in Section D.
    This announcement provides notice of the DOC Pre-Award Notification 
Requirements that apply to all DOC sponsored grant and cooperative 
agreement programs and may supplement those program announcements which 
make reference to this notice. Some of the DOC general provisions 
published herein contain, by reference or substance, a summary of the 
pertinent statutes or regulations published in the U.S. Code (U.S.C.), 
Federal Register, Code of Federal Regulations (CFR), Executive Orders 
(EOs), OMB Circulars (circulars), or Assurances (Forms SF-424B, 424D). 
To the extent that it is a summary, such provision is not in derogation 
of, or an amendment to, any such statute, regulation, EO, circulars, or 
Forms SF-424B and SF-424D.
    Each individual award notice will complete and include an analysis 
of the requirements in Executive Order 12866, Executive Order 13132, 
the Administrative Procedure Act, the Regulatory Flexibility Act, and 
the Paperwork Reduction Act, as applicable.
    A. The following pre-award notice provisions will apply to all 
applicants for and recipients of DOC grants and cooperative agreements:
    1. Federal Policies and Procedures. Applicants, recipients and 
subrecipients are subject to all Federal laws and Federal and DOC 
policies, regulations, and procedures applicable to Federal financial 
    2. Debarment, Suspension, Drug-Free Workplace, and Lobbying 
Provisions. All applicants must comply with the requirements of Subpart 
C of 15 CFR Part 26, ``Governmentwide Debarment and Suspension 
(Nonprocurement),'' 15 CFR Part 29, ``Governmentwide Requirements for 
Drug-Free Workplace (Financial Assistance)'' (published in the Federal 
Register on November 26, 2003, 68 FR 66534), and 15 CFR Part 28, ``New 
Restrictions on Lobbying,'' including the submission of required forms 
and obtaining certification from lower tier applicants/bidders.
    3. Pre-Award Screening of Applicant's and Recipient's Management 
Capabilities, Financial Condition, and Present Responsibility. It is 
the policy of DOC to make awards to applicants and recipients who are 
competently managed, responsible, financially capable and committed to 
achieving the objectives of the award(s) they receive. Therefore, pre-
award screening may include, but is not limited to, the following 
    (a) Past Performance. Unsatisfactory performance under prior 
Federal awards may result in an application not being considered for 
    (b) Credit Checks. A credit check will be performed on individuals, 
for-profit, and non-profit organizations.
    (c) Delinquent Federal Debts. No award of Federal funds shall be 
made to an applicant who has an outstanding delinquent Federal debt 
    (1) The delinquent account is paid in full,
    (2) A negotiated repayment schedule is established and at least one 
payment is received, or
    (3) Other arrangements satisfactory to DOC are made.
    (4) Pursuant to 31 U.S.C. 3720B, unless waived, the DOC is not 
permitted to extend financial assistance in the form of a loan, loan 
guarantee, or loan insurance to any person delinquent on a nontax debt 
owed to a Federal agency. This prohibition does not apply to disaster 
    (5) Pursuant to 28 U.S.C. 3201(e), unless waived by the DOC, a 
debtor who has a judgment lien against the debtor's property for a debt 
to the United States shall not be eligible to receive any grant or loan 
which is made, insured, guaranteed, or financed directly or indirectly 
by the United States or to receive funds directly from the Federal 
Government in any program, except funds to which the debtor is entitled 
as beneficiary, until the judgment is paid in full or otherwise 
    (d) Name Check Review. A name check review will be performed by the 
OIG on key individuals associated with non-profit and for-profit 
organizations, unless (1) proposed award amounts are $100,000 or less; 
(2) applicants have been recipients of financial assistance from the 
Department of Commerce for three or more consecutive years without any 
adverse programmatic or audit finding; or (3) applicants are units of a 
state or local government. Name checks are intended to reveal if any 
key individuals associated with the applicant have been convicted of or 
are presently facing criminal charges (e.g., fraud, theft, perjury), or 
other matters which significantly reflect on the applicant's management 
honesty or financial integrity. If any of the conditions listed below 
in paragraphs (1), (2), or (3) occur, DOC reserves the right to take 
one or more of the following actions: Consider suspension/termination 
of an award immediately for cause; require the removal of any key 
individual from association with management of and/or implementation of 
the award; and make appropriate provisions or revisions with respect to 
the method of payment and/or financial reporting requirements:
    (1) A key individual fails to submit the required Form CD-346, 
Applicant for Funding Assistance;
    (2) A key individual makes an incorrect statement or omits a 
material fact on the Form CD-346; or
    (3) The name check reveals significant adverse findings that 
reflect on the business integrity or responsibility of the recipient 
and/or key individual.
    (e) List of Parties Excluded from Procurement and Nonprocurement 
Programs. The Excluded Parties Listing System (EPLS) maintained by the 
General Services Administration (GSA) {Found at http://epls.arnet.gov{time}  that lists parties excluded from Federal 
procurement and nonprocurement programs will be checked to assure that 
an applicant is not debarred or suspended on a government-wide basis 
from receiving financial assistance.
    (f) Pre-Award Accounting System Surveys. The Grants Office, in 
cooperation with the OIG when appropriate, may require a pre-award 
survey of the applicant's financial management system in cases where 
the recommended applicant has had no prior Federal support, the 
operating unit has reason to question whether the financial management 
system meets Federal financial management standards, or the applicant 
is being considered for a high-risk designation.
    4. No Obligation for Future Funding. If an application is selected 
for funding,

[[Page 78391]]

DOC has no obligation to provide any additional future funding in 
connection with that award. Amendment of an award to increase funding 
or to extend the period of performance is at the total discretion of 
    5. Pre-Award Activities. If applicants incur any costs prior to an 
award being made, they do so solely at their own risk of not being 
reimbursed by the Government. Notwithstanding any verbal or written 
assurance that may have been received, there is no obligation on the 
part of DOC to cover preaward costs unless approved by the Grants 
Officer as part of the terms when the award is made, or as authorized 
for awards that support research by 15 CFR 14.25(e)(4).
    6. Freedom of Information Act (FOIA) Disclosure. The FOIA, 5 U.S.C. 
552 and implementing DOC regulations at 15 CFR Part 4, set forth DOC's 
rules to make requested material, information, and records publicly 
available. Unless prohibited by law and to the extent required under 
the FOIA, contents of applications and proposals submitted by 
applicants may be released in response to FOIA requests.
    7. False Statements. A false statement on an application is grounds 
for denial or termination of an award and grounds for possible 
punishment by a fine or imprisonment as provided in 18 U.S.C. 1001.
    8. Application Forms. Unless the individual programs specify 
differently in their annual notice of availability of funding or in 
other appropriate publications, the following forms and certifications 
will be used in applying for DOC grants and cooperative agreements: OMB 
Standard Forms 424, Application for Federal Assistance; SF-424A, Budget 
Information--Non-Construction Programs; SF-424B, Assurances--Non-
Construction Programs; SF-424C, Budget Information--Construction 
Programs; SF-424D, Assurances--Construction Programs; as well as the 
Commerce Department (CD) form CD-346, Applicant for Funding Assistance, 
as appropriate, shall be used in applying for financial assistance. In 
addition, Forms CD-511, Certification Regarding Lobbying; CD-512, 
Certification Regarding Lobbying--Lower-Tier Covered Transactions; and 
SF-LLL, Disclosure of Lobbying Activities, will be used as appropriate.
    9. Environmental Requirements. Environmental impacts must be 
considered by Federal decision makers in their decisions whether or not 
to (1) approve a proposal for Federal assistance; (2) approve the 
proposal with mitigation; or (3) approve a different proposal/grant 
having less adverse environmental impacts. Federal environmental laws 
require that the funding agency initiate a planning process with an 
early consideration of potential environmental impacts that projects 
funded with Federal assistance may have on the environment. The 
recipient and subrecipients must comply with all environmental 
standards, to include those prescribed under the following statutes and 
Executive Orders, and shall identify to the awarding agency any impact 
the award may have on the environment. In some cases, award funds can 
be withheld by the Grants Officer under a special award condition 
requiring the recipient to submit additional environmental compliance 
information sufficient to enable the DOC to make an assessment on any 
impacts that a project may have on the environment.
    (a) The National Environmental Policy Act of 1969 (42 U.S.C. 4321 
et seq.). Recipients of Federal assistance are required to identify to 
the awarding agency any impact an award will have on the quality of the 
human environment, and assist the agency to comply with the National 
Environmental Policy Act. Applicants for assistance may be required to 
prepare environmental impact information as part of a proposal.
    (b) Floodplain Management, EO 11988 and, Protection of Wetlands, EO 
11990, May 24, 1977. Recipients must identify proposed actions in 
Federally defined floodplains and wetlands to enable the agency to make 
a determination whether there is an alternative to minimize any 
potential harm.
    (c) Clean Air Act, Clean Water Act, and EO 11738. Recipients must 
comply with the provisions of the Clean Air Act (42 U.S.C. 7401 et 
seq.), Clean Water Act (33 U.S.C. 1251 et seq.), and EO 11738, and 
shall not use a facility on EPA's List of Violating Facilities in 
performing any award that is nonexempt under 40 CFR 15.5, and shall 
notify the Program Officer in writing if it intends to use a facility 
that is on the EPA List of Violating Facilities or knows that the 
facility has been recommended to be placed on the List.
    (d) The Flood Disaster Protection Act of 1973 (42 U.S.C. 4002 et 
seq.). Flood insurance, when available, is required for Federally 
assisted construction or acquisition in flood-prone areas.
    (e) The Endangered Species Act of 1973, as amended (16 U.S.C. 1531 
et seq.). Recipients must identify any impact or activities which may 
involve a threatened or endangered species. Federal agencies have the 
responsibility to ensure that no adverse effects to a protected species 
or habitat occur from actions under Federal assistance awards and 
conduct the required reviews under the Endangered Species Act, as 
    (f) The Coastal Zone Management Act, as amended (16 U.S.C. 1451 et 
seq.). Funded projects must be consistent with a coastal state's 
approved management program for the coastal zone.
    (g) The Coastal Barriers Resources Act (16 U.S.C. 3501 et seq.). 
Restrictions are placed on Federal funding for actions within a Coastal 
Barrier System.
    (h) The Wild and Scenic Rivers Act, as amended (16 U.S.C. 1271 et 
seq.). This Act applies to awards that may affect existing or proposed 
components of the National Wild and Scenic Rivers system.
    (i) The Safe Drinking Water Act of 1974, as amended (42 U.S.C. 
300f-j). This Act precludes Federal assistance for any project that the 
EPA determines may contaminate a solesource aquifer so as to threaten 
public health.
    (j) The Resource Conservation and Recovery Act of 1976, as amended 
(42 U.S.C. 6901 et seq.). This act regulates the generation, 
transportation, treatment, and disposal of hazardous wastes, and also 
provides that recipients of Federal funds give preference in their 
procurement programs to the purchase of recycled products pursuant to 
EPA guidelines.
    (k) The Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980, as amended, and the Superfund Amendments and 
Reauthorization Act of 1986, and the Community Environmental Response 
Facilitation Act of 1992, as amended, (42 U.S.C. 9601 et seq.). These 
requirements address responsibilities of hazardous substance releases, 
threatened releases and environmental cleanup. There is also a 
requirement to impose reporting and community involvement requirements 
to ensure disclosure of the release or disposal of regulated substances 
and cleanup of hazards.
    (l) Environmental Justice in Minority Populations and Low Income 
Populations, EO 12898, February 11, 1994. This order identifies and 
addresses adverse human health or environmental effects of programs, 
policies and activities on low income and minority populations.
    10. Limitation of Liability. In no event will the Department of 
Commerce be responsible for proposal preparation costs if programs 
announced under notices of funding availability fail to receive funding 
or are cancelled because of other agency priorities. Publication of

[[Page 78392]]

announcements of funding availability do not oblige the agency to award 
any specific project or to obligate any available funds.
    B. The following general provisions will apply to all DOC grant and 
cooperative agreement awards:
    1. Administrative Requirements and Cost Principles. The uniform 
administrative requirements for all DOC grants and cooperative 
agreements are codified at 15 CFR Part 14, ``Uniform Administrative 
Requirements for Grants and Agreements with Institutions of Higher 
Education, Hospitals, Other Non-Profit, and Commercial Organizations;'' 
and 15 CFR Part 24, ``Uniform Administrative Requirements for Grants 
and Agreements to State and Local Governments.'' The following list of 
cost principles incorporated by reference in 15 CFR Parts 14 and 24 are 
included in DOC's grants and cooperative agreements: OMB Circular A-21, 
``Cost Principles for Educational Institutions;'' OMB Circular A-87, 
``Cost Principles for State, Local and Indian Tribal Governments;'' OMB 
Circular A-122, ``Cost Principles for Nonprofit Organizations;'' and 
Federal Acquisition Regulation Subpart 31.2, ``Contracts with 
Commercial Organizations,'' codified at 48 CFR 31.2. Applicable 
administrative requirements and cost principles are identified in each 
award and are incorporated into the award by reference.
    2. Award Payments. When advanced payment is authorized, advances 
will be limited to the minimum amounts necessary to meet immediate 
disbursement needs, but in no case should advances exceed the amount of 
cash required for a 30-day period. Advanced funds not disbursed in a 
timely manner must be promptly returned to DOC. Certain bureaus within 
the DOC use the Department of Treasury's Automated Standard Application 
for Payment (ASAP) system. In order to receive payments under ASAP, 
recipients will be required to enroll with the Department of Treasury, 
Financial Service, Regional Financial Centers, which allows them to use 
the on-line and Voice Response System (VRS) method of withdrawing funds 
from their ASAP established accounts.
    3. Federal and Non-Federal Sharing.
    (a) Awards that include Federal and non-Federal sharing will 
incorporate a budget consisting of shared allowable costs. If actual 
allowable costs are less than the total approved budget, the Federal 
and non-Federal cost shares shall be calculated by applying the 
approved Federal and non-Federal cost share ratios to actual allowable 
costs. If actual allowable costs are greater than the total approved 
budget, the Federal share will not exceed the total Federal dollar 
amount authorized by the award.
    (b) The non-Federal share, whether in cash or in-kind, will be 
expected to be paid out at the same general rate as the Federal share. 
Exceptions to this requirement may be granted by the Grants Officer 
based on sufficient documentation demonstrating previously determined 
plans for or later commitment of cash or in-kind contributions. In any 
case, recipients must meet the cost share commitment over the life of 
the award.
    4. Budget Changes. When the terms of an award allow the recipient 
to transfer funds among approved direct cost categories, the transfer 
authority does not authorize the recipient to create new budget 
categories within an approved budget unless the Grants Officer has 
provided prior approval. In addition, the recipient will not be 
authorized at any time to transfer amounts budgeted for direct costs to 
the indirect costs line item or vice versa, without written prior 
approval of the Grants Officer.
    5. Indirect Costs.
    (a) Indirect costs will not be allowable charges against an award 
unless specifically included as a line item in the approved budget 
incorporated into the award. (The term ``indirect cost'' has been 
replaced with the term ``facilities and administrative costs'' under 
OMB Circular A-21, ``Cost Principles for Educational Institutions.'')
    (b) Excess indirect costs may not be used to offset unallowable 
direct costs.
    (c) If the recipient has not previously established an indirect 
cost rate with a Federal agency, the negotiation and approval of a rate 
will be subject to the procedures in the applicable cost principles and 
the following subparagraphs:
    (1) a. State, local, and Indian Tribal Governments; Educational 
Institutions; and Non-Profit Organizations (Non-Commercial 
    For those organizations for which DOC is cognizant or has 
oversight, DOC or its designee will either negotiate a fixed rate with 
carryforward provisions or, in some instances, limit its review to 
evaluating the procedures described in the recipient's cost allocation 
methodology plan. Indirect cost rates and cost allocation methodology 
reviews are subject to future audits to determine actual indirect 
    b. Commercial Organizations
    For commercial organizations, cognizant federal agency is defined 
as the agency that provides the largest dollar amount of negotiated 
contracts, including options. If the only federal funds received by a 
commercial organization are DOC award funds, then DOC becomes the 
cognizant federal agency for the purpose of indirect cost negotiations. 
For those organizations for which DOC is cognizant, DOC or its designee 
will negotiate a fixed rate with carryforward provisions for the 
recipient. Fixed rate means an indirect cost rate which has the same 
characteristics as a pre-determined rate, except that the difference 
between the estimated costs and the actual costs of the period covered 
by the rate is carried forward as an adjustment to the rate computation 
of the subsequent period. DOC or its designee will negotiate indirect 
cost rates using the cost principles found in 48 CFR Part 31, 
``Contract Cost Principles and Procedures.'' For guidance on how to put 
an indirect cost plan together go to: http://www2.dol.gov/oasam/programs/guide.htm.
    (2) Within 90 days of the award start date, the recipient shall 
submit to the address listed below documentation (indirect cost 
proposal, cost allocation plan, etc.) necessary to perform the review. 
The recipient shall provide the Grants Officer with a copy of the 
transmittal letter. Office of Acquisition Management, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Room-6054, 
Washington, DC 20230.
    (3) The recipient can use the fixed rate proposed in the indirect 
cost plan until such time as the DOC provides a response to the 
submitted plan. Actual indirect costs must be calculated annually and 
adjustments made through the carryforward provision used in calculating 
next year's rate. This calculation of actual indirect costs and the 
carryforward provision is subject to audit. Indirect cost rate 
proposals must be submitted annually. Organizations that have 
previously established indirect cost rates must submit a new indirect 
cost proposal to the cognizant agency within six months after the close 
of each recipient's fiscal year.
    (4) When DOC is not the oversight or cognizant Federal agency, the 
recipient shall provide the Grants Officer with a copy of a negotiated 
rate agreement or a copy of the transmittal letter submitted to the 
cognizant or oversight Federal agency requesting a negotiated rate 
    (5) If the recipient fails to submit the required documentation to 
the DOC within 90 days of the award start date, the recipient may be 
precluded from recovering any indirect costs under the award. If the 
DOC, oversight, or cognizant Federal agency determines there is a 
finding of good and sufficient

[[Page 78393]]

cause to excuse the recipient's delay in submitting the documentation, 
an extension of the 90-day due date may be approved by the Grants 
    (6) Regardless of any approved indirect cost rate applicable to the 
award, the maximum dollar amount of allocable indirect costs for which 
DOC will reimburse the recipient shall be the lesser of the line item 
amount for the Federal share of indirect costs contained in the 
approved budget of the award, or the Federal share of the total 
allocable indirect costs of the award based on the indirect cost rate 
approved by an oversight or cognizant Federal agency and current at the 
time the cost was incurred, provided the rate is approved on or before 
the award end date.
    6. Tax Refunds. Refunds of FICA/FUTA taxes received by a recipient 
during or after an award period must be refunded or credited to DOC 
where the benefits were financed with Federal funds under the award. 
Recipients must agree to contact the Grants Officer immediately upon 
receipt of these refunds. Recipients must further agree to refund 
portions of FICA/FUTA taxes determined to belong to the Federal 
Government, including refunds received after the award end date.
    7. Other Federal Awards with Similar Programmatic Activities. 
Recipients will be required to provide written notification to the 
Federal Program Officer and the Grants Officer in the event that, 
subsequent to receipt of the DOC award, other financial assistance is 
received to support or fund any portion of the scope of work 
incorporated into the DOC award. DOC will not pay for costs that are 
funded by other sources.
    8. Non-Compliance With Award Provisions. Failure to comply with any 
or all of the provisions of an award may have a negative impact on 
future funding by DOC and may be considered grounds for any or all of 
the following actions: establishment of an account receivable, 
withholding payments under any DOC awards to the recipient, changing 
the method of payment from advance to reimbursement only, or the 
imposition of other special award conditions, suspension of any DOC 
active awards, and termination of any DOC active awards.
    9. Prohibition Against Assignment by the Recipient. Notwithstanding 
any other provision of an award, recipients may not transfer, pledge, 
mortgage, or otherwise assign an award, or any interest therein, or any 
claim arising thereunder, to any party or parties, banks, trust 
companies, or other financing or financial institutions without the 
express written approval of the Grants Officer.
    10. Non-Discrimination Requirements. There are several Federal 
statutes, regulations, Executive Orders, and policies relating to 
nondiscrimination. No person in the United States shall, on the ground 
of race, color, national origin, handicap, religion, age, or sex, be 
excluded from participation in, be denied the benefits of, or be 
subject to discrimination under any program or activity receiving 
Federal financial assistance. These requirements include but are not 
limited to:
    (a) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.) and DOC implementing regulations published at 15 CFR Part 8 
prohibiting discrimination on the grounds of race, color, or national 
origin under programs or activities receiving Federal financial 
    (b) Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et 
seq.) and implementing regulations at 15 CFR Part 8a prohibiting 
discrimination on the basis of sex under Federally assisted education 
programs or activities;
    (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 
U.S.C. 794) and DOC implementing regulations published at 15 CFR Part 
8b prohibiting discrimination on the basis of handicap under any 
program or activity receiving or benefitting from Federal assistance;
    (d) The Age Discrimination Act of 1975, as amended (42 U.S.C. 6101 
et seq.) and DOC implementing regulations published at 15 CFR Part 20 
prohibiting discrimination on the basis of age in programs or 
activities receiving Federal financial assistance;
    (e) The Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 
seq.) prohibiting discrimination on the basis of disability under 
programs, activities, and services provided or made available by state 
and local governments or instrumentalities or agencies thereto, as well 
as public or private entities that provide public transportation;
    (f) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et 
seq.), as amended, relating to nondiscrimination in the sale, rental or 
financing of housing;
    (g) Parts II and III of Executive Order 11246, as amended by 
Executive Orders 11375 and 12086 requiring Federally assisted 
construction contracts to include the nondiscrimination provisions of 
Sec.  202 and 203 of that Executive Order and Department of Labor 
regulations implementing Executive Order 11246, 41 CFR 60-1.4(b).
    (h) EO 13166 (August 11, 2000), ``Improving Access to Services for 
Persons With Limited English Proficiency,'' and DOC policy guidance 
issued on March 24, 2003 (68 FR 14180) to Federal financial assistance 
recipients on the Title VI prohibition against national origin 
discrimination affecting Limited English Proficient (LEP) persons.
    (i) In recognition of the constitutionally-protected interest of 
religious organizations in making religiously-motivated employment 
decisions, Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e 
et seq., expressly exempts religious organizations from the prohibition 
against discrimination on the basis of religion. 42 U.S.C. 2000e-1(a).
    11. Audits of Organizations Not Covered By OMB Circular A-133. In 
accordance with 15 CFR 14.26(c) and (d), for-profit hospitals, 
commercial, and other organizations not covered by the audit provisions 
of OMB Circular A-133 that expend $500,000 or more in a year in Federal 
funding, are required to have a program-specific audit performed at the 
conclusion of the project, but no less than once every five years. The 
DOC award may include a line item in the budget for the cost of the 
audit. Some DOC programs have specific audit guidelines that will be 
incorporated into the award. If DOC does not have a program-specific 
audit guide available for the program, the auditor should follow 
Generally Accepted Government Auditing Standards and the requirements 
for a program-specific audit as described in OMB Circular A-133 Sec.  
    12. Policies and Procedures for Resolution of Audit-Related Debts. 
DOC has established policies and procedures for handling the resolution 
and reconsideration of financial assistance audits which have resulted 
in, or may result in, the establishment of a debt (account receivable) 
for financial assistance awards. These policies and procedures are 
contained in the Federal Register notice dated January 27, 1989. See 54 
FR 4053. The policies and procedures are also provided in more detail 
in the Department of Commerce Financial Assistance Standard Terms and 
    13. Debts. Any debts determined to be owed the Federal Government 
shall be paid promptly by the recipient. In accordance with 15 CFR 
21.4, a debt will be considered delinquent if it is not paid within 15 
days of the due date, or if there is no due date, within 30 days of the 
billing date. Failure to pay a debt by the due date, or if there is no 
due date, within 30 days of the billing date, shall result in the 
imposition of late payment charges. In addition, failure to

[[Page 78394]]

pay the debt or establish a repayment agreement by the due date, or if 
there is no due date, within 30 days of the billing date, will also 
result in the referral of the debt for collection action and may result 
in DOC taking further action as specified in the terms of the award. 
Funds for payment of a debt must not come from other Federally 
sponsored programs. Verification that other Federal funds have not been 
used will be made, e.g., during on-site visits and audits.
    14. Post-Award Discovery of Adverse Information. After an award is 
made, if adverse information on a recipient or any key individual 
associated with a recipient is discovered which reflects significantly 
and adversely on the recipient's responsibility, the Grants Officer may 
take the following actions:
    (a) Require the recipient to correct the conditions.
    (b) Consider the recipient to be ``high risk'' and unilaterally 
impose special award conditions to protect the Federal Government's 
    (c) Suspend or terminate an active award. The recipient will be 
afforded adequate due process while effecting such actions.
    (d) Require the removal of personnel from association with the 
management of and/or implementation of the project and require Grants 
Officer approval of personnel replacements.
    15. Competition and Codes of Conduct.
    (a) Pursuant to the certification in SF-424B, Paragraph 3, 
recipients must maintain written standards of conduct to establish 
safeguards to prohibit employees from using their positions for a 
purpose that constitutes or presents the appearance of a personal or 
organizational conflict of interest, or personal gain in the 
administration of this award and any subawards.
    (b) Recipients must maintain written standards of conduct governing 
the performance of their employees engaged in the award and 
administration of subawards. No employee, officer, or agent shall 
participate in the selection, award, or administration of a subaward 
supported by Federal funds if a real or apparent conflict of interest 
is or 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 in which he/she serves as an officer or 
which employs or is about to employ any of the parties mentioned in 
this section, has a financial or other interest in the organization 
selected or to be selected for a subaward. The officers, employees, and 
agents of the recipient may not solicit or accept anything of monetary 
value from subrecipients. 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 
must provide for disciplinary actions to be applied for violations of 
such standards by officers, employees, or agents of a recipient.
    (c) All subawards will be made in a manner to provide, to the 
maximum extent practicable, open and free competition. Recipients must 
be alert to organizational conflicts of interest as well as other 
practices among subrecipients that may restrict or eliminate 
competition. In order to ensure objective subrecipient performance and 
eliminate unfair competitive advantage, subrecipients that develop or 
draft work requirements, statements of work, or requests for proposals 
will be excluded from competing for such subawards.
    (d) For purposes of the award, a financial interest may include 
employment, stock ownership, a creditor or debtor relationship, or 
prospective employment with an applicant. An appearance of impairment 
of objectivity could result from an organizational conflict where, 
because of other activities or relationships with other persons or 
entities, a person is unable or potentially unable to act in an 
impartial manner. It could also result from non-financial gain to the 
individual, such as benefit to reputation or prestige in a professional 
    16. Minority Owned Business Enterprise. DOC encourages recipients 
to utilize minority and women-owned firms and enterprises in contracts 
under financial assistance awards. The Minority Business Development 
Agency can assist recipients in matching qualified minority owned 
enterprises with contract opportunities.
    17. Subaward and/or Contract to a Federal Agency. Recipients, 
subrecipients, contractors, and/or subcontractors may not sub-grant or 
sub-contract any part of an approved project to any Federal department, 
agency, instrumentality, or employee thereof, without the prior written 
approval of the Grants Officer.
    18. Foreign Travel. Recipients must comply with the provisions of 
the Fly America Act, 49 U.S.C. 40118. The Fly America Act requires that 
Federal travelers and others performing U.S. Government-financed 
foreign air travel must use U.S. flag carriers, to the extent that 
service by such carriers is available. Foreign air carriers may be used 
only in specific instances, such as when a U.S. flag air carrier is 
unavailable, or use of U.S. flag carrier service will not accomplish 
the agency's mission. The implementing Federal Travel Regulations are 
found at 41 CFR 301-10.131 through 301-10.143.
    19. Purchase of American-Made Equipment and Products. Recipients 
are hereby notified that they are encouraged, to the greatest extent 
practicable, to purchase American-made equipment and products with 
funding provided under DOC financial assistance awards.
    20. Intellectual Property Rights.
    (a) Inventions. The rights to any invention made by a recipient 
under a DOC financial assistance award are determined by the Bayh-Dole 
Act, Pub. L. 96-517, as amended, and codified in 35 U.S.C. 200 et seq., 
except as otherwise required by law. The specific rights and 
responsibilities are described in more detail in 37 CFR Part 401 and in 
particular, in the standard patent rights clause in 37 CFR 401.14, 
which is incorporated by reference into awards.
    (b) Patent Notification Procedures. Pursuant to EO 12889, the 
Department of Commerce (DOC) is required to notify the owner of any 
valid patent covering technology whenever the DOC or its financial 
assistance recipients, without making a patent search, knows (or has 
demonstrable reasonable grounds to know) that technology covered by a 
valid United States patent has been or will be used without a license 
from the owner. To ensure proper notification, if the recipient uses or 
has used patented technology under this award without a license or 
permission from the owner, the recipient will be required to notify the 
DOC Patent Counsel and the Grants Officer. This notice does not 
necessarily mean that the government authorizes and consents to any 
copyright or patent infringement occurring under the financial 
    (c) Data, Databases, and Software. The rights to any work produced 
or purchased under a DOC Federal financial assistance award are 
determined by 15 CFR 24.34 and 15 CFR 14.36. Such works may include 
data, databases or software. The recipient owns any work produced or 
purchased under a DOC Federal financial assistance award subject to 
DOC's right to obtain, reproduce, publish or otherwise use the work or 
authorize others to receive, reproduce, publish or otherwise use the 
data for Government purposes.
    (d) Copyright. The recipient may copyright any work produced under 
a DOC Federal financial assistance award subject to DOC's royalty-free 
nonexclusive and irrevocable right to

[[Page 78395]]

reproduce, publish or otherwise use the work or authorize others to do 
so for Government purposes. Works jointly authored by DOC and recipient 
employees may be copyrighted but only the part authored by the 
recipient is protected because, under 17 U.S.C. 105, works produced by 
Government employees are not copyrightable in the United States. On 
occasion, DOC may ask the recipient to transfer to DOC its copyright in 
a particular work when DOC is undertaking the primary dissemination of 
the work. Ownership of copyright by the Government through assignment 
is permitted by 17 U.S.C. 105.
    21. Seat Belt Use. Pursuant to EO 13043, recipients should 
encourage employees and contractors to enforce on-the-job seat belt 
policies and programs when operating recipient/company-owned, rented or 
personally owned vehicles.
    22. Research Involving Human Subjects. All proposed research 
involving human subjects must be conducted in accordance with 15 CFR 
Part 27, ``Protection of Human Subject.'' No research involving human 
subjects is permitted under any DOC financial assistance award unless 
expressly authorized by the Grants Officer.
    23. Federal Employee Expenses. Federal agencies are generally 
barred from accepting funds from a recipient to pay transportation, 
travel, or other expenses for any Federal employee unless specifically 
approved in the terms of the award. Use of award funds (Federal or non-
Federal) or the recipient's provision of in-kind goods or services for 
the purposes of transportation, travel, or any other expenses for any 
Federal employee, may raise appropriation augmentation issues. In 
addition, DOC policy prohibits the acceptance of gifts, including 
travel payments for Federal employees, from recipients or applicants 
regardless of the source.
    24. Preservation of Open Competition and Government Neutrality 
Towards Government Contractors' Labor Relations on Federal and 
Federally Funded Construction Projects. Pursuant to EO 13202, 
``Preservation of Open Competition and Government Neutrality Towards 
Government Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects,'' unless the project is exempted under section 
5(c) of the order, bid specifications, project agreements, or other 
controlling DOCuments for construction contracts awarded by recipients 
of grants or cooperative agreements, or those of any construction 
manager acting on their behalf, shall not: (1) Include any requirement 
or prohibition on bidders, offerors, contractors, or subcontractors 
about entering into or adhering to agreements with one or more labor 
organizations on the same or related construction project(s); or (2) 
otherwise discriminate against bidders, offerors, contractors, or 
subcontractors for becoming or refusing to become or remain signatories 
or otherwise to adhere to agreements with one or more labor 
organizations, on the same or other related construction project(s).
    25. Minority Serving Institutions (MSIs) Initiative. Pursuant to 
EOs 12876, 12900, and 13021, DOC is strongly committed to broadening 
the participation of MSIs in its financial assistance programs. DOC 
goals include achieving full participation of MSIs in order to advance 
the development of human potential, strengthen the Nation's capacity to 
provide high-quality education, and increase opportunities for MSIs to 
participate in and benefit from Federal financial assistance programs. 
DOC encourages all applicants and recipients to include meaningful 
participation of MSIs. Institutions eligible to be considered MSIs are 
listed on the Department of Education Web site at http://www.ed.gov/offices/OCR/minorityinst.html.
    26. Access to Records. The Inspector General of the DOC, or any of 
his or her duly authorized representatives, the Comptroller of the 
United States and, if appropriate, the State, shall have access to any 
pertinent books, documents, papers and records of the parties to a 
grant or cooperative agreement, whether written, printed, recorded, 
produced, or reproduced by any electronic, mechanical, magnetic or 
other process or medium, in order to make audits, inspections, 
excerpts, transcripts, or other examinations as authorized by law. An 
audit of an award may be conducted at any time. Recipients that are 
subject to OMB Circular A-133, ``Audits of States, Local Governments, 
and Non-Profit Organizations,'' and that expend $500,000 or more 
annually in Federal awards shall have an organization-wide audit 
performed, unless a program-specific audit is determined by DOC to be 
more appropriate. Other recipients will be subject to the audit 
requirements as stipulated in the award or subaward document.
    27. Scientific or Research Misconduct. Scientific or research 
misconduct refers to the fabrication, falsification, or plagiarism in 
proposing, performing, or reviewing research, or in reporting research 
results. It does not include honest errors or differences of opinion. 
The recipient organization has the primary responsibility to 
investigate allegations and provide reports to the Federal Government. 
Funds expended on an activity that is determined to be invalid or 
unreliable because of scientific misconduct may result in a 
disallowance of costs for which the institution may be liable for 
repayment to the awarding agency. The Office of Science and Technology 
Policy at the White House published in the Federal Register on December 
6, 2000, a final policy that addressed research misconduct. The policy 
was developed by the National Science and Technology Council (65 FR 
76260). The DOC requires that any allegation be submitted to the Grants 
Officer, who will also notify the OIG of such allegation. Generally, 
the recipient organization shall investigate the allegation and submit 
its findings to the Grants Officer. The DOC may accept the recipient's 
findings or proceed with its own investigation. The Grants Officer 
shall inform the recipient of the DOC's final determination.
    28. Intergovernmental Personnel Act of 1970 (42 U.S.C. 4728-4763). 
Recipients must comply with this act relating to prescribed standards 
for merit systems for programs funded under one of the 19 statutes or 
regulations specified in Appendix A of the Office of Personnel 
Management Standards for a Merit System of Personnel Administration (5 
CFR Part 900, Subpart F).
    29. Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970, as amended, (42 U.S.C. 4601 et seq.); and 
implementing regulations issued at 15 CFR Part 11. These provide for 
fair and equitable treatment of persons displaced or whose property is 
acquired as a result of Federal or Federally-assisted programs. These 
requirements apply to all interests in real property acquired for 
project purposes regardless of Federal participation in purchases.
    30. Historic Preservation. Recipients must assist the DOC in 
assuring compliance with Section 106 of the National Historic 
Preservation Act of 1966, as amended and the Advisory Council on 
Historic Preservation Guidelines, (16 U.S.C. 470 et seq.); the 
Archaeological and Historic Preservation Act of 1974, (16 U.S.C. 469a-1 
et seq.); Protection and Enhancement of the Cultural Environment, EO 
11593; Locating Federal Facilities on Historic Properties in our 
Nation's Central Cities, EO 13006; and Indian Sacred Sites, EO 13007 
(ensures protection and accommodation of access).

[[Page 78396]]

    31. Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4801 et 
seq.). This act prohibits the use of lead-based paint in construction 
or rehabilitation of residence structures.
    32. Hatch Act (5 U.S.C. 1501-1508 and 7324-7328). This act limits 
the political activities of employees or officers of state or local 
governments whose principal employment activities are funded in whole 
or in part with Federal funds.
    33. Labor standards for Federally-assisted construction 
subagreements (wage guarantees). Recipients must comply, as applicable, 
with the provisions of the Davis-Bacon Act (40 U.S.C. 276a to 276a-7); 
the Copeland Act (40 U.S.C. 276c and 18 U.S.C. 874); and the Contract 
Work Hours and Safety Standards Act (40 U.S.C. 327-333).
    34. Care and Use of Live Vertebrate Animals. Recipients must comply 
with the Laboratory Animal Welfare Act of 1966 (Pub. L. 89-544), as 
amended, (7 U.S.C. 2131 et seq.) (animal acquisition, transport, care, 
handling, and use in projects), and implementing regulations, 9 CFR 
Parts 1, 2, and 3; the Endangered Species Act (16 U.S.C. 1531 et seq.); 
Marine Mammal Protection Act (16 U.S.C. 1361 et seq.) (taking 
possession, transport, purchase, sale, export or import of wildlife and 
plants); The Nonindigenous Aquatic Nuisance Prevention and Control Act 
(16 U.S.C. 4701 et seq.) (ensure preventive measures are taken or that 
probable harm of using species is minimal if there is an escape or 
release); and all other applicable statutes pertaining to the care, 
handling, and treatment of warm blooded animals held for research, 
teaching, or other activities supported by Federal financial 
assistance. No research involving vertebrate animals is permitted under 
any DOC financial assistance award unless authorized by the Grants 
    35. Publications and Acknowledgment of Sponsorship. Publication of 
the results of a research project in appropriate professional journals 
is encouraged as an important method of recording and reporting 
scientific information. The recipient is required to submit a copy to 
the funding agency and when releasing information related to a funded 
project include a statement that the project or effort undertaken was 
or is sponsored by DOC. The recipient is also responsible for assuring 
that every publication of material (including Internet sites) based on 
or developed under an award, except scientific articles or papers 
appearing in scientific, technical or professional journals, contains 
the following disclaimer: `` This [report/video] was prepared by 
[recipient name] under award [number] from [name of operating unit], 
U.S. Department of Commerce. The statements, findings, conclusions, and 
recommendations are those of the author(s) and do not necessarily 
reflect the views of the [name of operating unit] or the U.S. 
Department of Commerce.'' This also applies to videos produced under 
DOC financial assistance awards.
    36. Videos Produced under DOC Financial Assistance Awards. Before 
production of a video for public viewing is begun, the Grants Officer 
must review and approve the production plans and the final video to 
ensure that it will be of an acceptable quality and appropriately 
represents the DOC.
    C. The Federal Register notices announcing the availability of 
Federal funds for each DOC competitive financial assistance program 
will contain only the following program-specific information: Summary 
description of program; deadline dates; addresses for submission of 
applications; information contacts (including electronic access); 
amount of funding available; statutory authority; Catalog of Federal 
Domestic Assistance (CFDA) number; eligibility requirements; cost 
sharing or matching requirements; Intergovernmental Review 
requirements; evaluation criteria used by the merit reviewers; 
selection procedures, including funding priorities/selection factors/
policy factors to be applied by the selecting official; and 
Administrative and National Policy Requirements.
    D. The DOC follows the uniform format for announcements of funding 
opportunities for discretionary grants and cooperative agreements 
established by the Office of Management and Budget in a policy letter 
published in the Federal Register. See 68 FR 37370 (June 23, 2003). 
These funding opportunity announcements are available on grants.gov or 
from the information contact listed in the Federal Register.

Executive Order 12866

    This notice has been determined to be ``not significant'' for 
purposes of EO 12866, ``Regulatory Planning and Review.''

Administrative Procedure Act and Regulatory Flexibility Act

    Because notice and comment are not required under 5 U.S.C. 553, or 
any other law, for this notice relating to public property, loans, 
grants benefits or contracts (5 U.S.C. 553(a)), a Regulatory 
Flexibility Analysis is not required and has not been prepared for this 

Executive Order 12132 (Federalism)

    It has been determined that this notice does not contain policies 
with Federalism implications as that term is defined in EO 13132.

Paperwork Reduction Act

    These regulatory actions do not impose any new reporting or 
recordkeeping requirements under the Paperwork Reduction Act. 
Notwithstanding any other provisions of the law, no person is required 
to respond to, nor shall any person be subject to a penalty for failure 
to comply with a collection-of-information, subject to the requirements 
of the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., unless 
that collection of information displays a currently valid Office of 
Management and Budget (OMB) control number. Forms SF-424, SF-424A, SF-
424B, SF-424C, SF-424D, SF-LLL, and CD-346, have been approved under 
control numbers 0348-0043, 0348-0044, 0348-0040, 0348-0041, 0348-0042, 
0348-0046, and 0605-0001, respectively.

Catalog of Federal Domestic Assistance

    This notice affects all of the grant and cooperative agreement 
programs funded by DOC. The Catalog of Federal Domestic Assistance can 
be accessed on the Internet under the DOC Grants Management Web site at 

List of Subjects

    Accounting, Administrative practice and procedures, Grants 
administration, Grant programs-economic development, Grant programs-
oceans, atmosphere and fisheries management, Grant programs-minority 
businesses, Grant programs-technology, Grant programs-
telecommunications, Grant programs-international, Reporting and 
recordkeeping requirements.

    Issued this 22nd day of December, 2004, at Washington, DC.
Michael S. Sade,
Director for Acquisition Management and Procurement Executive.
[FR Doc. 04-28635 Filed 12-29-04; 8:45 am]