Federal-State Research on Cooperatives Program

SUMMARY: This proposed rulemaking establishes within the Rural

Development Administration (RDA) a matching fund cooperative research

agreement program to State Departments of Agriculture, State

Agricultural Experiment Stations, and other related State Agencies to

conduct marketing research related to cooperatives. This rule

establishes the procedures to be followed annually in the solicitation

of cooperative agreement proposals, the evaluation of such proposals,

and the award of the cooperative agreements under this program. These

rules are necessary to award the funds appropriated to Agricultural

Marketing Service in fiscal year 1994 for research on cooperatives

under the Federal-States Marketing Improvement Program. The intended

effect is to encourage more research at state levels that will enhance

the well-being of agricultural cooperatives and their members.

DATES: Comments are invited from interested individuals and

organizations and must be received on or before June 8, 1994.

ADDRESSES: Submit written comments, in duplicate, to the Office of the

Chief, Regulations Analysis and Control Branch, Farmers Home

Administration, USDA, room 6348, South Agriculture Building, 14th

Street and Independence Avenue SW., Washington, DC 20250. All written

comments made pursuant to this notice will be available for public

inspection during regular work hours at the above address.

FOR FURTHER INFORMATION CONTACT: Dr. Thomas H. Stafford, Director,

Cooperative Marketing Division, Cooperative Services, Rural Development

Administration, USDA, Ag Box 3252, Washington, DC 20250-3252, Phone:

202-690-0368.

SUPPLEMENTARY INFORMATION:

Classification

This rule has been determined to be not-significant for purposes of

Executive Order 12866 and therefore has not been reviewed by OMB.

Paperwork Reduction Act

The information collection or recordkeeping requirements contained

in this regulation will be submitted for approval by the Office of

Management and Budget (OMB) under the provision of 44 U.S.C. chapter 35

and will be assigned an OMB control number in accordance with the

Paperwork Reduction Act of 1980 (44 U.S.C. 3507). Public reporting

burden for this collection of information is estimated to vary from 10

minutes to 36 hours per response with an average of 3.48 hours per

response, including the time for reviewing instructions, searching

existing data sources, gathering and maintaining the data needed, and

completing and reviewing the collection of information. Please send

written comments to the Office of Information and Regulatory Affairs,

OMB, Attention: Desk Officer for USDA, Washington, DC 20503. Please

send a copy of your comments to Jack Holston, Agency Clearance Officer,

USDA, RDA, Ag Box 0743, Washington, DC 20250.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-

612), the undersigned has determined and certified by signature of this

document that this rule will not have a significant economic impact on

a substantial number of small entities.

Environmental Impact Statement

This proposed regulation does not significantly affect the

environment. Therefore, an environmental impact statement is not

required under the National Environmental Policy Act of 1969, as

amended (42 U.S.C. 4321 et seq.).

Intergovernmental Review

This program is considered a part of ``Technical Assistance To

Cooperatives'' as listed as No. 10.350 in the ``Catalog of Federal

Domestic Assistance''. For reasons set forth in the Final Rule-related

Notice to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this

program is excluded from the scope of Executive Order No. 12372 which

requires intergovernmental consultation with State and local officials.

Civil Justice Reform

This document has been reviewed in accordance with Executive Order

(E.O.) 12778. It is the determination of RDA that this action does not

unduly burden the Federal Court System in that it meets all applicable

standards provided in section 2 of the Executive Order.

Discussion of Proposed Rule

It is the policy of this Department that rules relating to public

property, loans, grants, benefits, or contracts shall be published for

comment not withstanding the exemption of 5 U.S.C. 553 with respect to

such rules. While Executive Order 12866 recommends at least a 60-day

comment period for most proposed rules, the agency has determined that

30 days is sufficient in this case. The 30-day period meets

Administrative Procedures Act requirements. The FY 1994 appropriations

for this program also must be obligated before September 30, 1994;

therefore, a 30-day comment period is desired to allow research

proposals to be developed in time for cooperative agreements to be

awarded within the fiscal year. Furthermore, the procedures set out in

the proposed rule are similar to other USDA cooperative agreement

procedures and, therefore, are unlikely to elicit adverse comments.

Only $435,000 was appropriated for this program for FY 1994 and may

not be appropriated in subsequent years. However, it is the Agency's

expectation that funds will be appropriated for this program either as

a separate item or as part of the general appropriations for the Agency

in future years. Therefore, this proposed rule establishes the

guidelines for administering the program for future years.

The Federal-State Research on Cooperatives Program (FSROC) is

authorized under section 204(b) of the Agricultural Marketing Act of

1946 (7 U.S.C. 1623 (b)). The Agricultural Appropriations Act for 1994

specifically appropriated funds to Agricultural Marketing Service

(AMS), USDA to be used as a matching fund program designed to provide

assistance to State Departments of Agriculture and State Agricultural

Experiment Stations in conducting research related to agricultural

cooperatives. In order to use the cooperative expertise available only

in RDA, these funds, appropriated as part of the Federal-State

Marketing Improvement Program (FSMIP), have been transferred to the

Rural Development Administration, Cooperative Services (RDA-CS) to

administer. Previous funding for a similar program in Agricultural

Cooperative Service which has become RDA-CS was done on a

noncompetitive basis with Land-Grant Universities. It was the apparent

intent of Congress to have funds available for research on cooperatives

on the same basis as funds used in AMS's FSMIP. Since FSMIP has been an

effective program that has evolved since its authorization in 1946, it

is apparent that the procedures developed at AMS should be closely

mirrored in this new program with a cooperative content.

Under the proposed FSROC, RDA will solicit State Departments of

Agriculture, State bureaus and departments of markets, State

Agricultural Experiment Stations, and other appropriate State agencies

to submit research proposals to be funded on a competitive basis. The

solicitation will include broad areas of research that the Agency

wishes to emphasize so that the limited funds may more likely result in

research being done in the areas determined by the RDA staff to be high

priority. However, these areas of emphasis (Sec. 4285.58(b)(1)(v)) do

not restrict the submission of proposed projects that will be

considered if they meet the purposes of agricultural marketing as given

in the Agricultural Marketing Act of 1946 (7 U.S.C. 1623).

Section 204 (b) of the Agricultural Marketing Act of 1946 (7 U.S.C.

1623 (b)) restricts the funds for this program to be used on a

cooperative basis with State Departments of Agriculture, State bureaus

and departments of markets, State Agricultural Experiment Stations, and

other appropriate State agencies. Since these funds are specifically

for research related to agricultural marketing, it is the Agency's

interpretation that the other appropriate State agencies are primarily

1862 and 1890 Land Grant Colleges, since they conduct research related

to agricultural marketing. USDA's OGC will make a determination if a

particular college or university legally qualifies as a State agencies.

Other State agencies would be considered appropriate if they have the

ability and reason to conduct research related to cooperatives and to

agricultural marketing.

In addition to the statutes' requirement that the funds go to a

State agency, RDA is proposing limiting it to those Agencies that have

financial, legal, administrative and actual capacity to conduct the

research. The necessity of fiscal responsibility requires RDA to only

provide cooperative funds to those Agencies that also have the fiscal

and administrative ability to assure that the funds are expended

according to the purposes of the Agricultural Marketing Act of 1946.

Further, the Agricultural Marketing Act of 1946 requires that no

funds shall be allotted for any fiscal year to any State agency in

excess of the amount which such State agency makes available out of its

own funds for such research. RDA has interpreted this to mean the use

of cooperative agreements with the States agency providing at least

half of the funds for conducting the research on cooperatives. In

addition, RDA is limiting the funds to use by Agencies that can legally

and administratively conduct business with cooperative agreements since

it has determined that cooperative agreements are the appropriate

instrument to use for these funds.

The research proposals will be evaluated by a panel of Agency

technical experts to determine the proposals that are likely to result

in the most needed research that can be done with the limited funds

appropriated. The evaluation panel will make recommendations to the

Assistant Administrator for Cooperative Services, RDA who will have the

final decision on awarding the cooperative agreements. The panel of

Agency technical experts are necessary to evaluate what is expected to

be a variety of very technical proposals dealing with agricultural

marketing research and cooperatives. An outside peer review panel is

not being proposed because the Agency has the expertise to evaluate

such proposals, the outside panel would be extremely costly relative to

the small amount of total funds available, and the need to evaluate the

proposals in a timely manner.

To assure a consistency in the evaluation process the proposed rule

establishes a set of evaluation criteria (Sec. 4285.70) to assure the

research is consistent with the intent of the program and is worth the

funds that are to be spent on the project. The heaviest weight of the

objective criteria is placed on assuring that the research is based on

significant problems to assure that funds are not expended on

insignificant items nor in other fiscally irresponsible ways. The

second highest weight of the criteria is placed on the adequacy,

soundness, and appropriateness of the proposed approach to the research

in order that research is conducted that will be meaningful. The

relatively low weight put on the criteria of the feasibility and

probability of success of solving the problem was done because nearly

all projects are expected to be feasible and it is extremely difficult

to determine the likely success or failure of projects, but at the same

time the Agency's technical experience can be used to predict

approaches or problems that are not likely to give the desired results.

The relatively heavy weight placed on the personnel that are conducting

the research was done to assure that the best equipped and qualified to

conduct the research are selected as required by the Agricultural

Marketing Act of 1946 (7 U.S.C. 1623 (b)). Although cost is a

significant factor, no specific weight is assigned to the cost since

cost must be measured relative to the complexity of the problem, the

likely outcome of the project, the significance of the problem

identified, and relative to other proposals and the total appropriated

funds.

Upon recommendations of the technical panel, the Assistant

Administrator for Cooperative Services will determine which cooperative

agreements to fund. The Assistant Administrator for Cooperative

Services will also determine the reasonable length of time in which the

project should be completed. To assure timely research results the

agreements will be limited to three years from the time of the award.

However, if justified, that time can be renewed, but the total time

would be limited to 4 fiscal years so as to allow orderly closing of

the financial records of the Federal Government.

The accounting for the funds awarded for the cooperative agreement

will be subject to the normal rules for cooperative agreements within

USDA as given in part 3016 of this title. The proposed application

format is used to assure that sufficient information is obtained to

complete a cooperative agreement as given in part 3016 of this title.

In addition, the application format is similar to that used by

Cooperative State Research Service, USDA for their competitive grants

programs as given in Part 3200 of this title, since that format appears

to be very effective in helping assure projects that will be carried

out in a fiscally responsible manner.

The definition of agricultural products given below is repeated

from the Agricultural Marketing Act of 1946 (7 U.S.C. 1623 (b)). The

cooperative agreement instrument is as defined in the Implementation of

Federal Grant and Cooperative Agreement Act of 1977 (Pub.L. 95-224).

The proposed classification of the cooperative agreements as new,

renewal, or supplemental are used to facilitate administering the

agreements. The authorized and prohibited uses of cooperative

agreements funds given below (Sec. 4285.25 and Sec. 4285.46) are to

clarify the uses of funds as given in the Agricultural Marketing Act of

1946 (7 U.S.C. 1623 (b)) and follow the guidelines as used by the AMS

FSMIP. Because research requires doing things that may not be known

before the agreement is signed, the proposed rule allows for changes in

the cooperative agreement. To assure the cooperative agreement stays in

line with the intent of the program, however, all substantive changes

are required to be approved by the Assistant Administrator for

Cooperative Services.

List of Subjects in 7 CFR Part 4285

Agricultural commodities, Agricultural research, Cooperatives,

Reporting and recordkeeping requirements.

For the reasons set out in the preamble, 7 CFR Ch. XLII is proposed

to be amended by adding part 4285 to read as follows:

PART 4285--COOPERATIVE AGREEMENTS

Subpart A--Federal-State Research on Cooperatives Program

Sec.

4285.1 Objective.

4285.2 Cooperative agreement purposes.

4285.3 Definitions.

4285.4-4285.23 [Reserved]

4285.24 Eligibility.

4285.25 Authorized use of cooperative agreement funds.

4285.26-4285.45 [Reserved]

4285.46 Prohibited use of cooperative agreement funds.

4285.47 Limitations.

4285.48-4285.57 [Reserved]

4285.58 How to apply for cooperative agreement funds.

4285.59-4285.68 [Reserved]

4285.69 Evaluation and disposition of applications.

4285.70 Evaluation criteria.

4285.71-4285.80 [Reserved]

4285.81 Cooperative agreement awards.

4285.82 Use of funds; changes.

4285.83-4285.92 [Reserved]

4285.93 Other Federal statutes and regulations that apply.

4285.94 Other conditions.

4285.95-4285.100 [Reserved]

Authority: 7 U.S.C. 1623, 2201; Pub. L. 103-111, 107 Stat. 1046;

Pub. L. 103-211, 108 Stat. 3; USDA Secretary's Memorandum 1020-39,

dated September 30, 1993.

Subpart A--Federal-State Research on Cooperatives Program

Sec. 4285.1 Objective.

This subpart sets forth the policies and procedures and delegates

authority for providing Federal-State Research on Cooperatives

cooperative agreement funds to finance programs of research on

cooperatives as authorized under Section 204 (b) of the Agricultural

Marketing Act of 1946 (7 U.S.C. 1623 (b)). The primary purpose of this

matching fund program, via cooperative agreements, is to encourage

State Departments of Agriculture and State Agricultural Experiment

Stations in conducting research related to agricultural cooperatives.

Sec. 4285.2 Cooperative agreement purposes.

Rural Development Administration (RDA) may enter into a cooperative

agreement with a State agency to provide funds to the State agency to:

(a) Conduct marketing research related to agricultural

cooperatives.

(b) Assist other organizations in conducting marketing research

related to agricultural cooperatives.

Sec. 4285.3 Definitions.

As used in this part:

Agreement period. The total period of time approved by the

Assistant Administrator for Cooperative Services for conducting the

proposed project as outlined in an approved application. The time

period is normally no more than 3 years, renewable for cause not to

exceed a total of 4 fiscal years.

Agricultural products. Agricultural products include agricultural,

horticultural, viticultural, and dairy products, livestock and poultry,

bees, forest products, fish and shellfish, and any products thereof,

including processed or manufactured products, and any and all products

raised or produced on farms and any processed or manufactured product

thereof.

Assistant Administrator for Cooperative Services. The Assistant

Administrator for Cooperative Services, Rural Development

Administration, USDA or any authorized delegate.

Awarding official. The Assistant Administrator for Cooperative

Services or authorized delegate.

Cooperative Agreement. A legal instrument reflecting a relationship

between the United States Government and a State where:

(1) The principal purpose of the relationship is the transfer of

money, property, services, or anything of value to the State agency to

carry out research related to cooperatives; and

(2) Substantial involvement is anticipated between RDA, acting for

the Federal Government, and the State or other recipient during

performance of the research in the agreement.

Cooperator. The State agency designated in the cooperative

agreement award document as the responsible legal entity to whom a

cooperative agreement is awarded under this part.

Department. The U.S. Department of Agriculture.

Methodology. The research approach to be followed to carry out the

project.

Principal investigator. A single individual who is responsible for

the scientific and technical direction of the project, as designated by

the cooperator in the cooperative agreement application and approved by

the Assistant Administrator for Cooperative Services.

Project. The particular activity within the scope of one or more of

the research program areas identified in the annual program

solicitation that is supported by a cooperative agreement under this

part.

State agencies. State agencies include, among others, State

Agricultural Experiment Stations and State Departments of Agriculture

in the 50 States, territories or possessions of the United States and

other appropriate State agencies. Final determination of whether

certain 1890 or 1862 Land Grant institutions qualify as state agencies

will be determined on a case-by-case basis by the Office of the General

Counsel (OGC), USDA.

Secs. 4285.4-4285.23 [Reserved]

Sec. 4285.24 Eligibility.

To enter into a cooperative agreement for these funds, the

applicant must:

(a) Be a State Agency as defined in Sec. 4285.3;

(b) Have the financial, legal, administrative, and actual capacity

to assume and carry out the responsibilities imposed by the Agreement.

To meet the requirement of actual capacity it must either:

(1) Have necessary background and experience with proven ability to

perform responsibly in the field of economic, business management, or

other needed research area; or

(2) Have the necessary administrative and supervisory controls in

place to assure an agreed upon contracting organization has the proven

ability to perform responsibly in the field of economic, business

management, or other needed research area;

(c) Legally obligate itself to administer cooperative agreement

funds, provide adequate accounting of the expenditure of such funds,

and comply with the cooperative agreement;

(d) Provide at least 50 percent of the funds necessary to conduct

the research from non-federal funds; and

(e) Agree to conduct proposed research related to cooperatives and

agricultural marketing.

Sec. 4285.25 Authorized use of cooperative agreement funds.

Funds received for research under cooperative agreements in this

program shall only be used for:

(a) Payment of salaries and necessary employee benefits of

personnel as agreed upon in the Cooperative Agreement. Included are

salaries and benefits of State employees assigned full-time to one or

more projects, or the percent of the salaries and benefits related to

project work for State employees assigned part-time to research on one

or more projects. Salaries and benefits include basic salary, other

compensation such as holiday pay, sick or annual leave, and personnel

benefits (quarters allowance, payments to other funds such as

employees' life insurance, health benefits, retirement, Federal

Insurance Contributions Act (FICA), accident compensation, and similar

payments). For any of the benefit items when the State usually pays the

employer share, Federal funds may be used to pay the proportionate

share of such employer contributions.

(b) Payment of necessary and reasonable office expenses such as

office rental, office utilities, and office equipment rental. The

purchase of office equipment is permissible when the cooperator

determines it to be more economical than renting. However, as a general

rule, these types of expenses would be classified as indirect costs in

multiple funded organizations and would not be an allowable expense.

Planned purchases of equipment costing more than $200 per unit must be

approved by RDA. Equipment purchased becomes State property pursuant to

the cooperative agreement.

(c) Payment of necessary and reasonable costs of printing

publications of research project results. However, all such

publications should show the RDA as cooperator in the project and bear

the following statement: ``State funds for this project (publication)

were matched with Federal funds under the Federal-State Research on

Cooperatives Program of the U.S. Department of Agriculture, Rural

Development Administration, Cooperative Services, as provided by the

Agricultural Marketing Act of 1946 and (appropriate) fiscal year

appropriations.''

(d) Purchase of office supplies (such as paper, pens, pencils, and

trade magazines) and postage needed for project activities.

(e) Payment of necessary and reasonable travel expenses.

Secs. 4285.26-4285.45 [Reserved]

Sec. 4285.46 Prohibited use of cooperative agreement funds.

(a) The Agricultural Marketing Act prohibits the use of Federal

funds to pay for newspaper or periodical space and radio and television

time, either directly to the media or indirectly though an advertising

agency or other firm. County and State fair exhibits, as well as

commodity months and weeks, are also excluded as the research on

cooperatives program activities.

(b) Federal funds cannot be used to purchase products or samples of

products to give away to the public.

(c) Federal program funds cannot be used to purchase:

(1) Promotional pieces such as point-of-sale materials, promotional

kits, billboard space and signs, streamers, automobile stickers, table

tents, and placemats; or

(2) Promotion items of a personal gift nature.

(d) Cooperative agreement funds cannot be used to conduct general

publicity or information programs designed to build the image of the

State's agriculture or of a particular State Department of Agriculture

or Agricultural Experiment Station.

(e) Project funds cannot be used to pay for the salary and travel

of employees of cooperatives, trade associations, commodity groups, and

other industry organizations, or of State personnel while engaged in

managing market orders, cooperatives, or other group endeavors.

(f) Commissioners, Directors, and Secretaries of State Departments

of Agriculture, Agricultural Experiment Stations, and other State

agencies cannot charge their salaries and travel to project funds, with

the exception of travel to workshops or conferences devoted to the

Federal-State Research On Cooperatives Program.

(g) Funds made available for this program shall not be subject to

reduction for indirect costs or for tuition remission.

Sec. 4285.47 Limitations.

The amount of funds available for the cooperative agreements under

this program is limited to the amount appropriated for the fiscal year.

Secs. 4285.48-4285.57 [Reserved]

Sec. 4285.58 How to apply for cooperative agreement funds.

(a) A program solicitation will be prepared and announced through

publications such as the Federal Register, professional trade journals,

agency or program handbooks, and/or any other appropriate means, as

early as practicable each fiscal year in which funds are appropriated

for the program.

(b) The annual program solicitation will contain information

sufficient to enable all eligible applicants to prepare proposals

including:

(1) Desired research topics. The FY-94 solicitation will encourage

studies:

(i) To improve the efficiency and effectiveness of marketing of

agricultural cooperatives;

(ii) To measure the impact of rural cooperatives on the local

economies;

(iii) That help identify opportunities to develop cooperatives for

new or alternative market uses of agricultural products;

(iv) That help identify ways to develop agricultural marketing

cooperatives; and,

(v) Addressing other cooperative marketing objectives;

(2) Explanation of eligibility requirements as outlined in

Sec. 4285.24;

(3) The notice of availability of application forms and

instructions for submission of applications;

(4) The notice of deadline dates for postmarking proposal packages;

(c) Executive Order 12372. The cooperative agreements for research

related to cooperatives are subject to the provisions of Executive

Order 12372 (3 CFR, 1982 Comp., p. 197), which allows States to review

all its applications for funds and/or actions under specific Federal

programs. Most of the States have designated a ``Single Point of

Contact'' within the State for the listed programs and have established

a procedure to handle applications. If the State has adopted this

procedure, Section 16 of the Standard Form 424, ``Application for

Federal Assistance,'' needs to be completed when applying for the

cooperative agreement funds under this part.

(d) Format for proposals. Unless otherwise indicated by the

Department in the annual program solicitation, the following

information must be submitted for the preparation of proposals under

this program:

(1) Form SF-424, ``Application for Federal Assistance.''

(2) Form SF-424A, ``Budget Information - Non-Construction

Programs.''

(3) Form SF-424B, ``Assurances - Non-Construction Programs.''

(4) Statement of Work. The application must include a narrative

statement describing the nature of the proposed research. The Statement

of Work must include at least the following:

(i) Title of the Project. The title of the proposal must be brief,

yet represent the major thrust of the project.

(ii) Project Leaders. List the name(s) of the principal

investigator(s). Minor collaborators or consultants should be so

designated and not listed as principal investigators.

(iii) Need for the Project. A concisely worded rationale behind the

proposed research must be presented. The need for the proposed research

must be clearly related to marketing and to the needs of agricultural

cooperatives.

(iv) Objectives of the project. The specific description of the

overall project goal(s) and supporting objectives must be presented.

(v) Procedures for conducting the research. The hypotheses or

questions being asked and the methodology being applied to the proposed

project must be described. A description of any subcontracting

arrangements that will be used for conducting the research must be

included. A tentative schedule for conducting major steps involved in

the investigation must also be included.

(vi) The expected output of the project. A description of how the

results of the research will be disseminated should be presented.

Responsibility for publishing any research reports or other types of

output should also be identified.

(5) Collaborative arrangements. If the nature of the proposed

project requires collaboration or subcontractual arrangements with

other research scientists, corporations, organizations, agencies, or

entities, the applicant must identify the collaborator(s) and provide a

full explanation of the nature of the collaboration. Evidence (i.e.,

letters of intent) should be provided to assure reviewers that the

collaborators involved have agreed to render this service. In addition,

the proposal must indicate whether or not such a collaborative

arrangement(s) has the potential for conflict(s) of interest.

(6) Personnel support. To assist reviewers in assessing the

competence and experience of the proposed project staff, key personnel

who will be involved in the proposed project must be identified

clearly. For each principal investigator involved, and for all senior

associates and other professional personnel who expect to work on the

project, whether or not funds are sought for their support, the

following must be included:

(i) An estimate of the time commitments necessary;

(ii) Curriculum Vitae. The curriculum vitae should be limited to a

presentation of academic and research credentials, e.g., educational,

employment and professional history, and honors and awards. Unless

pertinent to the project, it should not include meetings attended,

seminars given, or personal data such as birth date, martial status, or

community activities; and

(iii) Publication List(s). A chronological list of all publications

in refereed journals during the past five years, including those in

press, must be provided for each professional project member for whom a

curriculum vitae is provided. Also list other non-refereed technical

publications that have relevance to the proposed project. Authors

should be listed in the same order as they appear on each paper cited,

along with the title and complete reference as these usually appear in

journals.

Secs. 4285.59-4285.68 [Reserved]

Sec. 4285.69 Evaluation and disposition of applications.

(a) Evaluation. (1) All proposals received from eligible applicants

and postmarked in accordance with deadlines established in the annual

program solicitation shall be evaluated by the Assistant Administrator

for Cooperative Services through an RDA staff panel. The Assistant

Administrator for Cooperative Services will select the evaluation panel

from staff determined to be highly qualified in the subject matter

areas that were emphasized in the current year's solicitation and from

those with no potential conflict of interest with the applicants.

(2) Prior to technical examination, a preliminary review will be

made for responsiveness to the program solicitation (e.g., relationship

of proposal to research topic(s) listed in solicitation). Proposals

that do not fall within the guidelines as stated in the program

solicitation will be eliminated from competition and will be returned

to the applicant.

(3) Proposals will be ranked based on evaluation criteria

established in Sec. 4285.70 and financial support levels will be

recommended to the Assistant Administrator for Cooperative Services by

the panel within the limitation of the total funding available in the

fiscal year. The purpose of these evaluations is to provide information

upon which the Assistant Administrator for Cooperative Services may

make informed judgements in selecting proposals. Such recommendations

are advisory only and are not binding on the awarding official of RDA.

To ensure a comprehensive evaluation, all applications should be

written with the care and thoroughness accorded papers for publication.

(b) Disposition. (1) On the basis of the Assistant Administrator

for Cooperative Services's evaluation of an application in accordance

with paragraph (a) of this section, the Assistant Administrator for

Cooperative Services will either:

(i) Approve support using currently available funds;

(ii) Defer support due to lack of funds or need for further

evaluation; or

(iii) Disapprove support for the proposed project in whole or in

part.

(2) With respect to any approved project, the Assistant

Administrator for Cooperative Services will determine the project

period during which the project may be funded.

(3) Any deferral or disapproval of an application will not preclude

its reconsideration or reapplication during subsequent fiscal years.

However, applicants must reapply if reconsideration is desired.

(4) The Assistant Administrator for Cooperative Services will not

make a cooperative agreement funding award, based upon an application

covered by this part, unless the application has been properly reviewed

in accordance with the provisions of this part and unless said

reviewers have made recommendations concerning the scientific merit and

relevance to the program of such application.

Sec. 4285.70 Evaluation criteria.

(a) In evaluating the proposal, the RDA staff review panel and the

awarding official will take into account the degree to which the

proposal demonstrates the following:

(1) Focus on a practical solution to a significant problem

involving one or more of the following on a cooperative business basis:

the preparation for market, processing, packaging, handling, storing,

transporting, distributing, or marketing of agricultural products.

(35%)

(2) Adequacy, soundness, and appropriateness of the proposed

approach to solve the identified problem. (30%)

(3) Feasibility and probability of success of project solving the

problem. (10%)

(4) Qualifications, experience in related work, competence, and

availability of project personnel to direct and carry out the project.

(25%)

(b) In addition, the cost relative to the expected research results

will be considered in determining the awarding of the agreements.

Secs. 4285.71-4285.80 [Reserved]

Sec. 4285.81 Cooperative agreement awards.

(a) General. Within the limit of funds available for such purpose,

the awarding official shall make awards for cooperative agreements to

those applicants whose proposals are judged most meritorious in the

announced program areas under the evaluation criteria and procedures

set forth in this part. The date specified by the Assistant

Administrator for Cooperative Services as the beginning of the project

period shall be no later than September 30 of the Federal fiscal year

in which the project is approved and funds are appropriated for such

purpose, unless otherwise permitted by law. All funds awarded under

this part shall be expended solely in accordance with the methods

identified in approved application and budget, the regulations of this

part, the terms and conditions of the award, the applicable Federal

cost principles, and the Department's ``Uniform Federal Assistance

Regulations'' (part 3015 of this title) and the Department's ``Uniform

Administrative Requirements for Grants and Cooperative Agreements to

State and Local Governments'' (part 3016 of this title).

(b) Cooperative agreement award document and notice of award--(1)

Cooperative agreement award document. The award document shall include

at a minimum the following:

(i) Legal name and address of performing organization or

institution to whom the Assistant Administrator for Cooperative

Services has competitively awarded funds under the terms of this part;

(ii) Title of project;

(iii) Name(s) and address(es) of principal investigator(s) chosen

to direct and control approved activities;

(iv) Identifying cooperative agreement number assigned by RDA;

(v) Project period, specifying the amount of time the Agency

intends to support the project without requiring recompetition for

funds;

(vi) Total amount of Agency financial assistance approved by the

Assistant Administrator for Cooperative Services during the project

period;

(vii) Legal authority(ies) under which the cooperative agreement is

awarded;

(viii) Approved budget plan for categorizing allocable project

funds to accomplish the stated purpose of the cooperative agreement

award; and

(ix) Other information or provisions deemed necessary by RDA to

carry out its agreement activities or to accomplish the purpose of a

particular cooperative agreement.

(2) Notice of award. The notice of award of funds for the

cooperative agreement will be in the form of a letter providing

pertinent instructions or information to the cooperator.

(c) Types of cooperative agreement instruments. The types of

cooperative agreements shall be as follows:

(1) New agreement. This is an agreement instrument by which RDA

agrees to support a specified level of effort for a project not

supported previously under this program. This type of agreement is

approved on the basis of an RDA Staff evaluation review and

recommendation.

(2) Renewal agreement. This is an agreement instrument by which RDA

agrees to provide additional funding for a project beyond the period

approved in an original or amended agreement, provided that the

cumulative period does not exceed the statutory limitation. When a

renewal application is submitted, it must include a summary of progress

to date from the previous agreement period. A renewal agreement shall

be based upon new application, de novo review and staff evaluation, new

recommendation and approval, and a new award instrument.

(3) Supplemental agreement. This is an instrument by which RDA

agrees to provide small amounts of additional funding under a new or

renewal cooperative agreement as specified in paragraphs (c)(1) and

(c)(2) of this section and may involve a short-term (usually one year

or less) extension of the project period beyond that approved in an

original or amended award, but in no case may the cumulative period for

the project exceed the statutory limitation. A supplement is awarded

only if required to assure adequate completion of the original scope of

work and if there is sufficient justification to warrant such action. A

request of this nature will not require additional review.

(d) Obligation of the Federal Government. The approval of any

application or the award of any funds for a cooperative agreement shall

not commit nor obligate the United States in any way to make any

renewal, supplemental, continuation, or other award with respect to any

approved application or portion of an approved application.

(e) Obligation of the cooperator. The cooperator shall be

responsible for:

(1) Making a brief quarterly progress reports at the end of each

December, March, June and September to the FSROC program staff for the

duration of the research project;

(2) Presenting a final administrative report on the project at the

end of the research project; and

(3) Preparing and publishing a report(s) of research findings for

dissemination to interested producers, cooperatives, and agencies.

Include recognition to financial and other assistance received from the

FSROC program.

Sec. 4285.82 Use of funds; changes.

(a) Delegation of fiscal responsibility. The cooperator may not, in

whole or in part, delegate or transfer to another person, institution,

or organization the responsibility for use or expenditure of

cooperative agreement funds.

(b) Change in project plans. (1) The permissible changes by the

cooperator, principal investigator(s), or other key project personnel

in the approved cooperative agreement shall be limited to changes in

methodology, techniques, or other aspects of the project to expedite

achievement of the project's approved goals. If the cooperator and/or

the principal investigator(s) is uncertain whether a particular change

complies with this provision, the question must be referred to the

Assistant Administrator for Cooperative Services for a final

determination.

(2) Changes in approved goals, or objectives, shall be requested by

cooperator and approved in writing by the Assistant Administrator for

Cooperative Services, or authorized delegate, prior to effecting such

changes. Normally, no requests for such changes outside the scope of

the original approved project will be approved.

(3) Changes in approved project leadership or the replacement or

realignment of other key project personnel shall be requested by the

cooperator and approved in writing by the Assistant Administrator for

Cooperative Services, or authorized delegate, prior to effecting such

changes.

(4) Transfers of actual performance of the substantive programmatic

work in whole or in part and provisions for payment of funds, whether

or not Federal funds are involved, shall be requested by the cooperator

and approved in writing by the Assistant Administrator for Cooperative

Services, or authorized delegate, prior to effecting such changes,

except as may be allowed in the terms and conditions of a cooperative

agreement award.

(c) Changes in project period. The project period determined

pursuant to Sec. 4285.81(b) may be extended by the Assistant

Administrator for Cooperative Services without additional financial

support, for such additional period(s) as the Assistant Administrator

for Cooperative Services determines may be necessary to complete, or

fulfill the purposes of, an approved project. Any extension, when

combined with the originally approved or amended project period, shall

not exceed four (4) years and shall be further conditioned upon prior

request by the cooperator and approval in writing by the Assistant

Administrator for Cooperative Services, or authorized delegate, except

as may be allowed in the terms and conditions of a cooperative

agreement award.

(d) Changes in approved budget. The terms and conditions of a

cooperative agreement will prescribe circumstances under which written

Agency approval must be requested and obtained prior to instituting

changes in an approved budget.

Secs. 4285.83-4285.92 [Reserved]

Sec. 4285.93 Other Federal statutes and regulations that apply.

Several other Federal statutes and regulations apply to cooperative

agreement proposals considered for review or to agreements awarded

under this part. These include but are not limited to:

(a) 7 CFR Part 1, Subpart A--USDA implementation of the Freedom of

Information Act;

(b) 7 CFR Part 3--USDA implementation of OMB Circular A-129

regarding debt collection;

(c) 7 CFR Part 15, Subpart A--USDA implementation of title VI of

the Civil Rights Act of 1964 in order to assure nondiscrimination;

(d) 7 CFR Part 1473--National Agricultural, Research, Extension,

and Teaching Policy Act Amendments of 1981 if the project involves a

college or university;

(e) 7 CFR Part 3015--USDA Uniform Federal Assistance Regulations

implementing OMB directives (i.e., Circular Nos. A-110, A-21, and A-

122) and incorporating provisions of 31 U.S.C. 6301-6308 (formerly, the

Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95-224, 92

Stat. 3), as well as general policy requirements applicable to

recipients of Departmental financial assistance;

(f) 7 CFR Part 3016--USDA Uniform Administrative Requirements for

Grants and Cooperative Agreements to State and Local Governments;

(g) 7 CFR Part 3017--USDA implementation of Governmentwide

Debarment and Suspension (Nonprocurement) and Governmentwide

Requirements for Drug-Free Workplace (Grants);

(h) 7 CFR Part 3018--USDA implementation of New Restrictions on

Lobbying. Imposes new prohibitions and requirements for disclosure and

certification related to lobbying on recipients of Federal contracts,

grants, cooperative agreements, and loans;

(i) 7 CFR Part 3051--Audits of Institutions of Higher Education and

Other Nonprofit Institutions;

(j) 29 U.S.C. 794, section 504--Rehabilitation Act of 1973, and 7

CFR Part 15B prohibiting discrimination based upon physical or mental

handicap in Federally assisted programs;

(k) 35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of

rights to inventions made by employees of small business firms and

domestic nonprofit organizations, including universities, in Federally

assisted programs (implementing regulations are contained in 37 CFR

part 401).

Sec. 4285.94 Other conditions.

Post-award requirements. Upon awarding the cooperative agreement,

the post-award requirements of subparts C and D of part 3016 of this

title apply.

Secs. 4285.95--4285.100 [Reserved]

Dated: March 28, 1994.

Bob J. Nash,

Under Secretary for Small Community and Rural Development.

[FR Doc. 94-10883 Filed 5-6-94; 8:45 am]

BILLING CODE 3410-07-W