Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, et cetera.; Final Rule DEPARTMENT OF LABOR

SUMMARY: The Department of Labor is issuing these regulations pursuant

to the requirements of the Office of Management and Budget (OMB)

Circular No. A-110 (Revised), which provides standards for obtaining

consistency and uniformity among Federal agencies in the administration

of grants and agreements with institutions of higher education,

hospitals, and other non-profit organizations. This rule also applies

to the Department of Labor's grants to commercial organizations,

foreign governments, organizations under the jurisdiction of foreign

governments and international organizations.

OMB issued Circular A-110 in 1976 and, except for a minor revision

in February 1987, the Circular remained unchanged until revised in

1993. To update the Circular, OMB established an interagency task force

to review the Circular. The task force solicited suggestions for

changes to the Circular from university groups, non-profit

organizations and other interested parties and compared for consistency

the provisions of similar provisions applied to State and local

governments. The revised Circular and these regulations reflect the

results of these efforts.

EFFECTIVE DATE: This rule is effective on July 27, 1994.

ADDRESSES: U.S. Department of Labor, Office of the Assistant Secretary

for Administration and Management, Directorate of Administrative and

Procurement Programs, Room S-1522, 200 Constitution Ave., NW.,

Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Melvin Goldberg, Office of Acquisition

Integrity, Division of Procurement and Grant Policy. Telephone 202-219-

9174, Extension 109 (this is not a toll free number).

SUPPLEMENTARY INFORMATION:

A. Background

OMB published a notice in the Federal Register (57 FR 39018) on

August 27, 1992, requesting comments on proposed revisions to OMB

Circular A-110. Interested parties were invited to submit comments. OMB

received over 200 comments from Federal agencies, non-profit

organizations, professional organizations and others. All comments were

considered in developing this final revision.

On November 29, 1993, at 58 FR 62992, OMB published a notice

containing its final revision to Circular A-110. In that publication,

OMB presented a summary of the major comments, grouped by subject, and

a response to each comment. Other changes were made to increase clarity

and readability.

Omitted from part 95 are requirements which DOL must meet pursuant

to the Circular. Those requirements deal with the relationship between

DOL and OMB and are not necessary to this rulemaking. OMB Circular A-

110 gives Federal agencies the discretion to make these regulations

applicable to grants and agreements awarded to commercial

organizations, foreign governments, organizations under the

jurisdiction of foreign governments, and international organizations.

The Department of Labor has chosen to do so. As permitted by OMB

Circular A-110, the Department has made a few changes to the language

of the Circular to fit the particular circumstances of the DOL

programs. The Department has added a definition of ``commercial

organizations'' and revised the definition of ``program income'' for

clarification purposes. The Department also has revised the language in

Sec. 95.25(e)(2), dealing with extensions, for editorial purposes. The

Department has deleted the words ``at least'' from Sec. 95.22(e)(2) to

enhance administrative efficiency by limiting invoicing to once a

month. Other minor editorial, technical, and clarifying changes are

made as well.

B. Publication in Final

The Department of Labor has determined, pursuant to 5 U.S.C.

553(b)(B), that good cause exists for waiving public comment on this

procedural amendment to the regulation because such comment is

unnecessary, impracticable, and contrary to the public interest. This

finding is made because all executive agencies are required to follow

OMB directives with respect to grants or assistance of property. See 41

U.S.C. Sec. 405 (The Office of Federal Procurement Policy Act).

C. Dates

The Department has determined that good cause exists for waiving

the customary requirement for delay in the effective date of a final

rule for 30 days following its publication. Therefore, this rule shall

be effective July 27, 1994. See 5 U.S.C. 553.

D. Procedural Matters

This rule is not a ``significant regulatory action'' as defined by

section 3(f) of Executive Order 12866. Since this rule was not preceded

by a proposed rule, a regulatory flexibility analysis is not required.

See 5 U.S.C. 601(2). Further, the Department of Labor certifies that

the rule will not have a significant economic impact on a substantial

number of small entities, because it does not affect the amount of

funds provided in the covered programs, but, rather, modifies and

updates administrative and procedural requirements. The recordkeeping

requirements in this rule have been approved by the Office of

Management and Budget, as required by the Paperwork Reduction Act of

1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by

the Office of Management and Budget, Approval Number 1225-0017.

List of Subjects

29 CFR Part 95

Grants programs, Grants administration, Government contracts,

Reporting and record-keeping requirements.

For the reasons set out in the preamble, subtitle A of title 29 of

the Code of Federal Regulations is amended, by adding a new part 95, as

set forth below.

Signed at Washington, DC, this 18th day of July, 1994.

Cynthia A. Metzler,

Assistant Secretary for Administration and Management.

PART 95--GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER

EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS, AND WITH

COMMERCIAL ORGANIZATIONS, FOREIGN GOVERNMENTS, ORGANIZATIONS UNDER

THE JURISDICTION OF FOREIGN GOVERNMENTS, AND INTERNATIONAL

ORGANIZATIONS

Subpart A--General

Sec.

95.1 Purpose.

95.2 Definitions.

95.3 Effect on other issuances.

95.4 Deviations.

95.5 Subawards.

Subpart B--Pre-Award Requirements

95.10 Purpose.

95.11 Pre-award policies.

95.12 Forms for applying for Federal assistance.

95.13 Debarment and suspension.

95.14 Special award conditions.

95.15 Metric system of measurement.

95.16 Resource Conservation and Recovery Act.

95.17 Certifications and representations.

Subpart C--Post-Award Requirements

Financial and Program Management

95.20 Purpose of financial and program management.

95.21 Standards for financial management systems.

95.22 Payment.

95.23 Cost sharing or matching.

95.24 Program income.

95.25 Revision of budget and program plans.

95.26 Non-Federal audits.

95.27 Allowable costs.

95.28 Period of availability of funds.

Property Standards

95.30 Purpose of property standards.

95.31 Insurance coverage.

95.32 Real property.

95.33 Federally-owned and exempt property.

95.34 Equipment.

95.35 Supplies and other expendable property.

95.36 Intangible property.

95.37 Property trust relationship.

Procurement Standards

95.40 Purpose of procurement standards.

95.41 Recipient responsibilities.

95.42 Codes of conduct.

95.43 Competition.

95.44 Procurement procedures.

95.45 Cost and price analysis.

95.46 Procurement records.

95.47 Contract administration.

95.48 Contract provisions.

Reports and Records

95.50 Purpose of reports and records.

95.51 Monitoring and reporting program performance.

95.52 Financial reporting.

95.53 Retention and access requirements for records.

Termination and Enforcement

95.60 Purpose of termination and enforcement.

95.61 Termination.

95.62 Enforcement.

Subpart D--After-the-Award Requirements

95.70 Purpose.

95.71 Closeout procedures.

95.72 Subsequent adjustments and continuing responsibilities.

95.73 Collection of amounts due.

Appendix A to Part 95--Contract Provisions

Authority: 5 U.S.C. 301; OMB Circular A-110; Secretary of

Labor's Order 4-76.

Subpart A--General

Sec. 95.1 Purpose.

This part establishes uniform administrative requirements for

Federal grants and agreements awarded to institutions of higher

education, hospitals, other non-profit organizations, commercial

organizations, foreign governments, organizations under the

jurisdiction of foreign governments, and international organizations.

DOL shall not impose additional or inconsistent requirements, except as

provided in Secs. 95.4 and 95.14 or unless specifically required by

Federal statute or executive order. Non-profit and commercial

organizations that implement Federal programs for the States are also

subject to State requirements.

Sec. 95.2 Definitions.

(a) Accrued expenditures means the charges incurred by the

recipient during a given period requiring the provision of funds for:

(1) Goods and other tangible property received;

(2) Services performed by employees, contractors, subrecipients,

and other payees; and,

(3) Other amounts becoming owed under programs for which no current

services or performance is required.

(b) Accrued income means the sum of:

(1) Earnings during a given period from

(i) Services performed by the recipient, and

(ii) Goods and other tangible property delivered to purchasers, and

(2) Amounts becoming owed to the recipient for which no current

services or performance is required by the recipient.

(c) Acquisition cost of equipment means the net invoice price of

the equipment, including the cost of modifications, attachments,

accessories, or auxiliary apparatus necessary to make the property

usable for the purpose for which it was acquired. Other charges, such

as the cost of installation, transportation, taxes, duty or protective

in-transit insurance, shall be included or excluded from the unit

acquisition cost in accordance with the recipient's regular accounting

practices.

(d) Advance means a payment made by Treasury check or other

appropriate payment mechanism to a recipient upon its request either

before outlays are made by the recipient or through the use of

predetermined payment schedules.

(e) Award means financial assistance that provides support or

stimulation to accomplish a public purpose. Awards include grants and

other agreements in the form of money or property in lieu of money, by

DOL to an eligible recipient. The term does not include: technical

assistance, which provides services instead of money; other assistance

in the form of loans, loan guarantees, interest subsidies, or

insurance; direct payments of any kind to individuals; and, contracts

which are required to be entered into and administered under

procurement laws and regulations.

(f) Cash contributions means the recipient's cash outlay, including

the outlay of money contributed to the recipient by third parties.

(g) Closeout means the process by which DOL determines that all

applicable administrative actions and all required work of the award

have been completed by the recipient and DOL.

(h) Commercial organization means any business entity organized

primarily for profit (even if its ownership is in the hands of a

nonprofit entity) with a place of business located in or outside the

United States. The term includes, but is not limited to, an individual,

partnership, corporation, joint venture, association, or cooperative.

(i) Contract means a procurement contract under an award or

subaward, and a procurement subcontract under a recipient's or

subrecipient's contract.

(j) Cost sharing or matching means that portion of project or

program costs not borne by DOL.

(k) Date of completion means the date on which all work under an

award is completed or the date on the award document, or any supplement

or amendment thereto, on which DOL sponsorship ends.

(l) Disallowed costs means those charges to an award that DOL

determines to be unallowable, in accordance with the applicable Federal

cost principles or other terms and conditions contained in the award.

(m) DOL means the U.S. Department of Labor, including its agencies

and organizational units.

(n) Equipment means tangible nonexpendable personal property

including exempt property charged directly to the award having a useful

life of more than one year and an acquisition cost of $5,000 or more

per unit. However, consistent with recipient policy, lower limits may

be established. Equipment includes, but is not limited to, equipment

acquired before the publication of these regulations and equipment

transferred from prior years.

(o) Excess property means property under the control of DOL that,

as determined by the Secretary of Labor, is no longer required for its

needs or the discharge of its responsibilities.

(p) Exempt property means tangible personal property acquired in

whole or in part with Federal funds, where DOL has statutory authority

to vest title in the recipient without further obligation to the

Federal Government.

(q) Federal agency means any United States executive department,

military department, government corporation, government controlled

corporation, any other establishment in the executive branch (including

the Executive Office of the President), or any independent regulatory

agency.

(r) Federal awarding grantor agency means the Federal agency that

provides an award to the recipient.

(s) Federal funds authorized means the total amount of Federal

funds obligated by DOL for use by the recipient. This amount may

include any authorized carryover of unobligated funds from prior

funding periods when permitted by DOL's regulations or DOL's

implementing instructions.

(t) Federal share of real property, equipment, or supplies means

that percentage of the property's acquisition costs and any improvement

expenditures paid with Federal funds.

(u) Funding period means the period of time when Federal funding is

available for obligation by the recipient.

(v) Grant officer means any person authorized to enter into, modify

or terminate any financial assistance awards and make related

determinations and findings. DOL grant officers shall be designated by

name on a ``Certificate of Appointment.''

(w) Intangible property and debt instruments means, but is not

limited to, trademarks, copyrights, patents and patent applications and

such property as loans, notes and other debt instruments, lease

agreements, stock and other instruments of property ownership, whether

considered tangible or intangible.

(x) Obligations means the amounts of orders placed, contracts and

grants awarded, services received and similar transactions during a

given period that require payment by the recipient during the same or a

future period.

(y) Outlays or expenditures means charges made to the project or

program. They may be reported on a cash or accrual basis. For reports

prepared on a cash basis, outlays are the sum of cash disbursements for

direct charges for goods and services, the amount of indirect expense

charged, the value of third party in-kind contributions applied and the

amount of cash advances and payments made to subrecipients. For reports

prepared on an accrual basis, outlays are the sum of cash disbursements

for direct charges for goods and services, the amount of indirect

expense incurred, the value of in-kind contributions applied, and the

net increase (or decrease) in the amounts owed by the recipient for

goods and other property received, for services performed by employees,

contractors, subrecipients and other payees and other amounts becoming

owed under programs for which no current services or performance are

required.

(z) Personal property means property of any kind except real

property. It may be tangible, having physical existence, or intangible,

having no physical existence, such as copyrights, patents, or

securities.

(aa) Prior approval means written approval by an authorized

official evidencing prior consent.

(bb) Program income means gross income earned by the recipient that

is directly generated by a supported activity or earned as a result of

the award (see exclusions in Sec. 95.24(e) and (h)). Program income

includes, but is not limited to, income from fees for services

performed, the use or rental of real or personal property acquired

under federally-funded projects, the sale of commodities or items

fabricated under an award, license fees and royalties on patents and

copyrights, and interest on loans made with award funds. Interest

earned on advances of Federal funds is not program income. Except as

otherwise provided in Federal awarding agency regulations or the terms

and conditions of the award, program income does not include the

receipt of principal on loans, rebates, credits, discounts, etc., or

interest earned on any of them.

(cc) Project costs means all allowable costs, as set forth in the

applicable Federal cost principles, incurred by a recipient and the

value of the contributions made by third parties in accomplishing the

objectives of the award during the project period.

(dd) Project period means the period established in the award

document during which Federal sponsorship begins and ends.

(ee) Property means, unless otherwise stated, real property,

equipment, intangible property and debt instruments.

(ff) Real property means land, including land improvements,

structures and appurtenances thereto, but excludes movable machinery

and equipment. Real property includes, but is not limited to, real

property acquired before publication of these regulations and real

property transferred from prior years.

(gg) Recipient means an organization receiving financial assistance

directly from DOL to carry out a project or program. The term includes

public and private institutions of higher education, public and private

hospitals, and other quasi-public and private non-profit organizations

such as, but not limited to, community action agencies, research

institutes, educational associations, and health centers. The term also

includes commercial organizations, foreign or international

organizations (such as agencies of the United Nations) which are

recipients, subrecipients, or contractors or subcontractors of

recipients or subrecipients. The term does not include government-owned

contractor-operated facilities or research centers providing continued

support for mission-oriented, large-scale programs that are government-

owned or controlled, or are designated as federally-funded research and

development centers.

(hh) Research and development means all research activities, both

basic and applied, and all development activities that are supported at

universities, colleges, and other non-profit institutions. ``Research''

is defined as a systematic study directed toward fuller scientific

knowledge or understanding of the subject studied. ``Development'' is

the systematic use of knowledge and understanding gained from research

directed toward the production of useful materials, devices, systems,

or methods, including design and development of prototypes and

processes. The term research also includes activities involving the

training of individuals in research techniques where such activities

utilize the same facilities as other research and development

activities and where such activities are not included in the

instruction function.

(ii) Small awards means a grant or cooperative agreement not

exceeding the small purchase threshold fixed at 41 U.S.C. Sec. 403(11)

(currently $25,000).

(jj) Subaward means an award of financial assistance in the form of

money, or property in lieu of money, made under an award by a recipient

to an eligible subrecipient or by a subrecipient to a lower tier

subrecipient. The term includes financial assistance when provided by

any legal agreement, even if the agreement is called a contract, but

does not include procurement of goods and services nor does it include

any form of assistance which is excluded from the definition of

``award'' in paragraph (e) of this section.

(kk) Subrecipient means the legal entity to which a subaward is

made and which is accountable to the recipient for the use of the funds

provided. The term includes foreign organizations and international

organizations (such as agencies of the United Nations).

(ll) Supplies means all personal property excluding equipment,

intangible property, and debt instruments as defined in this section,

and inventions of a contractor conceived or first actually reduced to

practice in the performance of work under a funding agreement

(``subject inventions''), as defined in 37 CFR part 401, ``Rights to

Inventions Made by Nonprofit Organizations and Small Business Firms

Under Government Grants, Contracts, and Cooperative Agreements.''

(mm) Suspension means an action by DOL that temporarily withdraws

Federal sponsorship under an award, pending corrective action by the

recipient or pending a decision to terminate the award by the Federal

awarding agency. Suspension of an award is a separate action from

suspension under DOL's regulations at 29 CFR part 98, implementing

E.O.'s 12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part

98, subpart D.

(nn) Termination means the cancellation of Federal sponsorship, in

whole or in part, under an agreement at any time prior to the date of

completion.

(oo) Third party in-kind contributions means the value of non-cash

contributions provided by non-Federal third parties. Third party in-

kind contributions may be in the form of real property, equipment,

supplies and other expendable property, and the value of goods and

services directly benefiting and specifically identifiable to the

project or program.

(pp) Unliquidated obligations, for financial reports prepared on a

cash basis, means the amount of obligations incurred by the recipient

that have not been paid. For reports prepared on an accrued expenditure

basis, they represent the amount of obligations incurred by the

recipient for which an outlay has not been recorded.

(qq) Unobligated balance means the portion of the funds authorized

by DOL that has not been obligated by the recipient and is determined

by deducting the cumulative obligations from the cumulative funds

authorized.

(rr) Unrecovered indirect cost means the difference between the

amount awarded and the amount which could have been awarded under the

recipient's approved negotiated indirect cost rate.

(ss) Working capital advance means a procedure whereby funds are

advanced to the recipient to cover its estimated disbursement needs for

a given initial period.

Sec. 95.3 Effect on other issuances.

For awards subject to this part, all administrative requirements of

codified program regulations, program manuals, handbooks and other

nonregulatory materials which are inconsistent with the requirements of

this part shall be superseded, except to the extent they are required

by statute, or authorized in accordance with the deviations provision

in Sec. 95.4.

Sec. 95.4 Deviations.

The Office of Management and Budget (OMB) may grant exceptions for

classes of grants or recipients subject to the requirements of this

part when exceptions are not prohibited by statute. However, in the

interest of maximum grant-wide uniformity, exceptions from the

requirements of this part shall be permitted only in unusual

circumstances. DOL may apply more restrictive requirements to a class

of recipients when approved by OMB. DOL may apply less restrictive

requirements when awarding small awards, except for those requirements

which are statutory. Exceptions on a case-by-case basis may also be

made by DOL.

Sec. 95.5 Subawards.

Unless sections of this part specifically exclude subrecipients

from coverage, the provisions of this part shall be applied to

subrecipients performing work under awards if such subrecipients are

institutions of higher education, hospitals, other non-profit

organizations, commercial organizations, foreign governments,

organizations under the jurisdiction of foreign governments, and

international organizations. State and local government subrecipients

are subject to the provisions of regulations implementing the grants

management common rule, ``Uniform Administrative Requirements for

Grants and Cooperative Agreements to State and Local Governments,'' and

codified by DOL at 29 CFR part 97 or its successor.

Subpart B--Pre-Award Requirements

Sec. 95.10 Purpose.

Sections 95.11 through 95.17 prescribe forms and instructions and

other pre-award matters to be used in applying for Federal awards.

Sec. 95.11 Pre-award policies.

Public Notice and Priority Setting. Federal awarding agencies shall

notify the public of its intended funding priorities for discretionary

grant programs, unless funding priorities are established by Federal

statute.

Sec. 95.12 Forms for applying for Federal assistance.

(a) Applicants shall use the SF-424 series or those forms and

instructions prescribed by DOL.

(b) The applicant shall complete the appropriate sections of the

SF-424 (Application for Federal Assistance) indicating whether the

application was subject to review by the State Single Point of Contact

(SPOC). The name and address of the SPOC for a particular State can be

obtained from DOL or the Catalog of Federal Domestic Assistance. The

SPOC shall advise the applicant whether the program for which

application is made has been selected by that State for review.

Sec. 95.13 Debarment and suspension.

Recipients shall comply with the nonprocurement debarment and

suspension common rule implementing E.O.'s 12549 and 12689, ``Debarment

and Suspension'' codified by DOL at 29 CFR part 98. This common rule

restricts subawards and contracts with certain parties that are

debarred, suspended or otherwise excluded from or ineligible for

participation in Federal assistance programs or activities.

Sec. 95.14 Special award conditions.

If an applicant or recipient:

(a) Has a history of poor performance,

(b) Is not financially stable,

(c) Has a management system that does not meet the standards

prescribed in this part,

(d) Has not conformed to the terms and conditions of a previous

award, or

(e) Is not otherwise responsible,

DOL may impose additional requirements as needed, provided that such

applicant or recipient is notified in writing as to: The nature of the

additional requirements, the reason why the additional requirements are

being imposed, the nature of the corrective action needed, the time

allowed for completing the corrective actions, and the method for

requesting reconsideration of the additional requirements imposed. Any

special conditions shall be promptly removed once the conditions that

prompted them have been corrected.

Sec. 95.15 Metric system of measurement.

The Metric Conversion Act, as amended by the Omnibus Trade and

Competitiveness Act (15 U.S.C. 205), declares that the metric system is

the preferred measurement system for U.S. trade and commerce. The Act

requires each Federal agency to establish a date or dates in

consultation with the Secretary of Commerce, when the metric system of

measurement will be used in the agency's procurements, grants, and

other business-related activities. Metric implementation may take

longer where the use of the system is initially impractical or likely

to cause significant inefficiencies in the accomplishment of federally-

funded activities. DOL shall follow the provisions of E.O. 12770,

``Metric Usage in Federal Government Programs.''

Sec. 95.16 Resource Conservation and Recovery Act.

Under the Resource Conservation and Recovery Act (RCRA) (Pub. L.

94-580 codified at 42 U.S.C. 6962), any State agency or agency of a

political subdivision of a State which is using appropriated Federal

funds must comply with Section 6002. Section 6002 requires that

preference be given in procurement programs to the purchase of specific

products containing recycled materials identified in guidelines

developed by the Environmental Protection Agency (EPA) (40 CFR parts

247-254). Accordingly, State and local institutions of higher

education, hospitals, and non-profit organizations that receive direct

Federal awards or other Federal funds shall give preference in their

procurement programs funded with Federal funds to the purchase of

recycled products pursuant to the EPA guidelines.

Sec. 95.17 Certifications and representations.

Unless prohibited by statute or codified regulation, DOL requires

recipients to submit certifications and representations required by

statute, executive order, or regulation on an annual basis only, if the

recipients have ongoing and continuing relationships with the agency.

Annual certifications and representations shall be signed by

responsible officials with the authority to ensure recipients'

compliance with the pertinent requirements.

Subpart C--Post-Award Requirements

Financial and Program Management

Sec. 95.20 Purpose of financial and program management.

Sections 95.21 through 95.28 prescribe standards for financial

management systems, methods for making payments and rules for:

Satisfying cost sharing and matching requirements, accounting for

program income, budget revision approvals, making audits, determining

allowability of cost, and establishing fund availability.

Sec. 95.21 Standards for financial management systems.

(a) Recipients shall relate financial data to performance data and

develop unit cost information whenever practical.

(b) Recipients' financial management systems shall provide for the

following:

(1) Accurate, current and complete disclosure of the financial

results of each federally-sponsored project or program in accordance

with the reporting requirements set forth in Sec. 95.52. Though DOL

requires reporting on an accrual basis from a recipient that maintains

its records on other than an accrual basis, the recipient shall not be

required to establish an accrual accounting system. These recipients

may develop such accrual data for its reports on the basis of an

analysis of the documentation on hand.

(2) Records that identify adequately the source and application of

funds for federally-sponsored activities. These records shall contain

information pertaining to Federal awards, authorizations, obligations,

unobligated balances, assets, outlays, income and interest.

(3) Effective control over and accountability for all funds,

property and other assets. Recipients shall adequately safeguard all

such assets and assure they are used solely for authorized purposes.

(4) Comparison of outlays with budget amounts for each award.

Whenever appropriate, financial information should be related to

performance and unit cost data.

(5) Written procedures to minimize the time elapsing between the

transfer of funds to the recipient from the U.S. Treasury and the

issuance or redemption of checks, warrants or payments by other means

for program purposes by the recipient. To the extent that the

provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-

453) govern, payment methods of State agencies, instrumentalities, and

fiscal agents shall be consistent with CMIA Treasury-State Agreements

or the CMIA default procedures codified at 31 CFR part 205,

``Withdrawal of Cash from the Treasury for Advances under Federal Grant

and Other Programs.''

(6) Written procedures for determining the reasonableness,

allocability and allowability of costs in accordance with the

provisions of the applicable Federal cost principles and the terms and

conditions of the award.

(7) Accounting records including cost accounting records that are

supported by source documentation.

(c) Where the Federal Government guarantees or insures the

repayment of money borrowed by the recipient, DOL, at its discretion,

may require adequate bonding and insurance if the bonding and insurance

requirements of the recipient are not deemed adequate to protect the

interest of the Federal Government.

(d) DOL may require adequate fidelity bond coverage where the

recipient lacks sufficient coverage to protect the Federal Government's

interest.

(e) Where bonds are required in the situations described above, the

bonds shall be obtained from companies holding certificates of

authority as acceptable sureties, as prescribed in 31 CFR part 223,

``Surety Companies Doing Business with the United States.''

Sec. 95.22 Payment.

(a) Payment methods shall minimize the time elapsing between the

transfer of funds from the United States Treasury and the issuance or

redemption of checks, warrants, or payment by other means by the

recipients. Payment methods of State agencies or instrumentalities

shall be consistent with Treasury-State CMIA agreements or default

procedures codified at 31 CFR part 205.

(b) Recipients are to be paid in advance, provided they maintain or

demonstrate the willingness to maintain:

(1) Written procedures that minimize the time elapsing between the

transfer of funds and disbursement by the recipient, and

(2) Financial management systems that meet the standards for fund

control and accountability as established in Sec. 95.21.

Cash advances to a recipient organization shall be limited to the

minimum amounts needed and be timed to be in accordance with the

actual, immediate cash requirements of the recipient organization in

carrying out the purpose of the approved program or project. The timing

and amount of cash advances shall be as close as is administratively

feasible to the actual disbursements by the recipient organization for

direct program or project costs and the proportionate share of any

allowable indirect costs.

(c) Whenever possible, advances shall be consolidated to cover

anticipated cash needs for all awards made by DOL to the recipient.

(1) Advance payment mechanisms include, but are not limited to,

Treasury check and electronic funds transfer.

(2) Advance payment mechanisms are subject to 31 CFR part 205.

(3) Recipients are authorized to submit requests for advances

monthly when electronic fund transfers are not used.

(d) Requests for Treasury check advance payment shall be submitted

on SF-270, ``Request for Advance or Reimbursement,'' or other forms as

may be authorized by OMB. This form is not to be used when Treasury

check advance payments are made to the recipient automatically through

the use of a predetermined payment schedule or if precluded by special

DOL instructions for electronic funds transfer.

(e) Reimbursement is the preferred method when the requirements in

paragraph (b) of this section cannot be met. DOL may also use this

method on any construction agreement, or if the major portion of the

construction project is accomplished through private market financing

or Federal loans, and the Federal assistance constitutes a minor

portion of the project.

(1) When the reimbursement method is used, DOL shall make payment

within 30 days after receipt of the billing, unless the billing is

improper.

(2) Recipients are authorized to submit requests for reimbursement

monthly when electronic funds transfers are not used.

(f) If a recipient cannot meet the criteria for advance payments

and DOL has determined that reimbursement is not feasible because the

recipient lacks sufficient working capital, DOL may provide cash on a

working capital advance basis. Under this procedure, DOL shall advance

cash to the recipient to cover its estimated disbursement needs for an

initial period generally geared to the awardee's disbursing cycle.

Thereafter, DOL shall reimburse the recipient for its actual cash

disbursements. The working capital advance method of payment shall not

be used for recipients unwilling or unable to provide timely advances

to their subrecipient to meet the subrecipient's actual cash

disbursements.

(g) To the extent available, recipients shall disburse funds

available from repayments to and interest earned on a revolving fund,

program income, rebates, refunds, contract settlements, audit

recoveries and interest earned on such funds before requesting

additional cash payments.

(h) Unless otherwise required by statute, DOL shall not withhold

payments for proper charges made by recipients at any time during the

project period unless paragraphs (h)(1) or (h)(2) of this section

apply.

(1) A recipient has failed to comply with the project objectives,

the terms and conditions of the award, or Federal reporting

requirements.

(2) The recipient or subrecipient is delinquent in a debt to the

United States as defined in OMB Circular A-129, ``Managing Federal

Credit Programs.'' Under such conditions, DOL may, upon reasonable

notice, inform the recipient that payments shall not be made for

obligations incurred after a specified date until the conditions are

corrected or the indebtedness to the Federal Government is liquidated.

(i) Standards governing the use of banks and other institutions as

depositories of funds advanced under awards are as follows:

(1) Except for situations described in paragraph (i)(2) of this

section, DOL shall not require separate depository accounts for funds

provided to a recipient or establish any eligibility requirements for

depositories for funds provided to a recipient. However, recipients

must be able to account for the receipt, obligation and expenditure of

funds.

(2) Advances of Federal funds shall be deposited and maintained in

insured accounts whenever possible.

(j) Consistent with the national goal of expanding the

opportunities for women-owned and minority-owned business enterprises,

recipients shall be encouraged to use women-owned and minority-owned

banks (a bank which is owned at least 50 percent by women or minority

group members).

(k) Recipients shall maintain advances of Federal funds in interest

bearing accounts, unless paragraph (k)(1), (k)(2), or (k)(3) of this

section apply.

(1) The recipient receives less than $120,000 in Federal awards per

year.

(2) The best reasonably available interest bearing account would

not be expected to earn interest in excess of $250 per year on Federal

cash balances.

(3) The depository would require an average or minimum balance so

high that it would not be feasible within the expected Federal and non-

Federal cash resources.

In keeping with Electronic Funds Transfer rules, (31 CFR Part 206),

interest should be remitted to the HHS Payment Management System

through an electronic medium such as the FEDWIRE Deposit system.

Recipients who do not have this capability should use a check.

(l) For those entities where CMIA and its implementing regulations

do not apply, interest earned on Federal advances deposited in interest

bearing accounts shall be remitted annually to Department of Health and

Human Services, Payment Management System, P.O. Box 6021, Rockville, MD

20852. Interest amounts up to $250 per year may be retained by the

recipient for administrative expense. State universities and hospitals

shall comply with CMIA, as it pertains to interest. If an entity

subject to CMIA uses its own funds to pay pre-award costs for

discretionary awards without prior written approval from DOL, it waives

its right to recover the interest under CMIA.

(m) Except as noted elsewhere in this part, only the following

forms shall be authorized for the recipients in requesting advances and

reimbursements. DOL shall not require more than an original and two

copies of these forms.

(1) SF-270, Request for Advance or Reimbursement. The SF-270 is the

standard form for all nonconstruction programs when electronic funds

transfer or predetermined advance methods are not used. DOL, however,

has the option of using this form for construction programs in lieu of

the SF-271, ``Outlay Report and Request for Reimbursement for

Construction Programs.''

(2) SF-271, Outlay Report and Request for Reimbursement for

Construction Programs. The SF-271 is the standard form to be used for

requesting reimbursement for construction programs. However, DOL may

substitute the SF-270 when DOL determines that it provides adequate

information to meet Federal needs.

Sec. 95.23 Cost sharing or matching.

(a) All contributions, including cash and third party in-kind,

shall be accepted as part of the recipient's cost sharing or matching

when such contributions meet all of the following criteria:

(1) Are verifiable from the recipient's records.

(2) Are not included as contributions for any other Federally-

assisted project or program.

(3) Are necessary and reasonable for proper and efficient

accomplishment of project or program objectives.

(4) Are allowable under the applicable cost principles.

(5) Are not paid by the Federal Government under another award,

except where authorized by Federal statute to be used for cost sharing

or matching.

(6) Are provided for in the approved budget when required by DOL.

(7) Conform to other provisions of this part, as applicable.

(b) Unrecovered indirect costs may be included as part of cost

sharing or matching only with prior written approval of the grant

officer.

(c) Values for recipient contributions of services and property

shall be established in accordance with the applicable cost principles.

If DOL authorizes recipients to donate buildings or land for

construction/facilities acquisition projects or long-term use, the

value of the donated property for cost sharing or matching shall be the

lesser of the value determined under paragraph (c)(1) or paragraph

(c)(2) of this section.

(1) The certified value of the remaining life of the property

recorded in the recipient's accounting records at the time of donation.

(2) The current fair market value. However, when there is

sufficient justification, the grant officer may approve the use of the

current fair market value of the donated property, even if it exceeds

the certified value at the time of donation to the project.

(d) Volunteer services furnished by professional and technical

personnel, consultants, and other skilled and unskilled labor may be

counted as cost sharing or matching if the service is an integral and

necessary part of an approved project or program. Rates for volunteer

services shall be consistent with those paid for similar work in the

recipient's organization. In those instances in which the required

skills are not found in the recipient organization, rates shall be

consistent with those paid for similar work in the labor market in

which the recipient competes for the kind of services involved. In

either case, paid fringe benefits that are reasonable, allowable, and

allocable may be included in the valuation.

(e) When an employer other than the recipient furnishes the

services of an employee, these services shall be valued at the

employee's regular rate of pay (plus an amount of fringe benefits that

are reasonable, allowable, and allocable, but exclusive of overhead

costs), provided these services are in the same skill for which the

employee is normally paid.

(f) Donated supplies may include such items as expendable

equipment, office supplies, laboratory supplies or workshop and

classroom supplies. Value assessed to donated supplies included in the

cost sharing or matching share shall be reasonable and shall not exceed

the fair market value of the property at the time of the donation.

(g) The method used for determining cost sharing or matching for

donated equipment, buildings and land for which title passes to the

recipient may differ according to the purpose of the award, if

paragraph (g)(1) or (g)(2) of this section apply.

(1) If the purpose of the award is to assist the recipient in the

acquisition of equipment, buildings or land, the total value of the

donated property may be claimed as cost sharing or matching.

(2) If the purpose of the award is to support activities that

require the use of equipment, buildings or land, normally only

depreciation or use charges for equipment and buildings may be made.

However, the full value of equipment or other capital assets and fair

rental charges for land may be allowed, provided that the grant officer

has approved the charges.

(h) The value of donated property shall be determined in accordance

with the usual accounting policies of the recipient, with the following

qualifications:

(1) The value of donated land and buildings shall not exceed its

fair market value at the time of donation to the recipient as

established by an independent appraiser (e.g., certified real property

appraiser or General Services Administration representative) and

certified by a responsible official of the recipient.

(2) The value of donated equipment shall not exceed the fair market

value of equipment of the same age and condition at the time of

donation.

(3) The value of donated space shall not exceed the fair rental

value of comparable space as established by an independent appraisal of

comparable space and facilities in a privately-owned building in the

same locality.

(4) The value of loaned equipment shall not exceed its fair rental

value.

(5) The following requirements pertain to the recipient's

supporting records for in-kind contributions from third parties:

(i) Volunteer services shall be documented and, to the extent

feasible, supported by the same methods used by the recipient for its

own employees.

(ii) The basis for determining the valuation for personal service,

material, equipment, buildings and land shall be documented.

Sec. 95.24 Program income.

(a) Except as provided in paragraph (e) of this section, program

income earned during the project period shall be retained by the

recipient and added to funds committed to the project by DOL and

recipient, and used to further eligible project or program objectives.

(b) Recipients shall have no obligation to the Federal Government

regarding program income earned after the end of the project period.

(c) Costs incident to the generation of program income may be

deducted from gross income to determine program income, provided these

costs have not been charged to the award.

(d) Proceeds from the sale of property are not program income and

shall be handled in accordance with the requirements of the Property

Standards (See Secs. 95.30 through 95.37).

(e) Unless DOL's regulations or the terms and condition of the

award provide otherwise, recipients shall have no obligation to the

Federal Government with respect to program income earned from license

fees and royalties for copyrighted material, patents, patent

applications, trademarks, and inventions produced under an award.

However, Patent and Trademark Amendments (35 U.S.C. 18) apply to

inventions made under an experimental, developmental, or research

award.

Sec. 95.25 Revision of budget and program plans.

(a) The budget plan is the financial expression of the project or

program as approved during the award process. It may include either the

Federal and non-Federal share, or only the Federal share, depending

upon DOL's requirements. It shall be related to performance for program

evaluation purposes whenever appropriate.

(b) Recipients are required to report deviations from budget and

program plans, and request prior approvals for budget and program plan

revisions, in accordance with this section.

(c) For nonconstruction awards, recipients shall request prior

written approvals from the grant officer for one or more of the

following program or budget changes:

(1) Change in the scope or the objective of the project or program

(even if there is no associated budget revision requiring prior written

approval).

(2) Change in a key person specified in the application or award

document.

(3) The absence for more than three months, or a 25-percent

reduction in time devoted to the project, by the approved project

director or principal investigator.

(4) The need for additional Federal funding.

(5) The transfer of amounts budgeted for indirect costs to absorb

increases in direct costs, or vice versa.

(6) The inclusion, unless waived by the grant officer, of costs

that require prior approval in accordance with OMB Circular A-21,

``Cost Principles for Institutions of Higher Education,'' OMB Circular

A 122, ``Cost Principles for Non-Profit Organizations,'' or 45 CFR part

74, Appendix E, ``Principles for Determining Costs Applicable to

Research and Development under Grants and Contracts with Hospitals,''

or 48 CFR part 31, ``Contract Cost Principles and Procedures,'' as

applicable.

(7) The transfer of funds allotted for training allowances (direct

payment to trainees) to other categories of expense.

(8) Unless described in the application and funded in the approved

awards, the subaward, transfer or contracting out of any work under an

award. This provision does not apply to the purchase of supplies,

material, equipment or general support services.

(d) No other prior approval requirements for specific items may be

imposed unless a deviation has been approved by OMB.

(e) Except for requirements listed in paragraphs (c)(1) and (c)(4)

of this section, the grant officer may waive cost-related and

administrative prior written approvals required by this part and OMB

Circulars A-21 and A-122. Such waivers may include authorizing

recipients to do any one or more of the following:

(1) Incur pre-award costs 90 calendar days prior to award or more

than 90 calendar days with the prior written approval of the grant

officer. All pre-award costs are incurred at the recipient's risk

(i.e., the grant officer is under no obligation to reimburse such costs

if for any reason the recipient does not receive an award or if the

award is less than anticipated and inadequate to cover such costs).

(2) Initiate a one-time extension of the expiration date of the

award of up to 12 months unless one or more of the following conditions

apply. For one-time extensions, the recipient must notify the grant

officer in writing with the supporting reasons and revised expiration

date at least 10 days before the expiration date specified in the

award. This one-time extension may not be exercised merely for the

purpose of using unobligated balances. The one-time extension may not

be initiated if:

(i) The terms and conditions of award prohibit the extension.

(ii) The extension requires additional Federal funds.

(iii) The extension involves any change in the approved objectives

or scope of the project.

(3) Carry forward unobligated balances to subsequent funding

periods.

(4) For awards that support research, unless the grant officer

provides otherwise in the award or in DOL's regulations, the prior

written approval requirements described in paragraph (e) are

automatically waived (i.e., recipients need not obtain such prior

written approvals) unless one of the conditions included in paragraph

(e)(2) applies.

(f) DOL may, at its option, restrict the transfer of funds among

direct cost categories or programs, functions and activities for awards

in which the Federal share of the project exceeds $100,000 and the

cumulative amount of such transfers exceeds or is expected to exceed 10

percent of the total budget as last approved by DOL. DOL shall not

permit a transfer that would cause any Federal appropriation or part

thereof to be used for purposes other than those consistent with the

original intent of the appropriation.

(g) All other changes to nonconstruction budgets, except for the

changes described in paragraph (j), do not require prior approval.

(h) For construction awards, recipients shall request prior written

approval promptly from the grant officer for budget revisions whenever

paragraphs (h)(1), (h)(2) or (h)(3) of this section apply.

(1) The revision results from changes in the scope or the objective

of the project or program.

(2) The need arises for additional Federal funds to complete the

project.

(3) A revision is desired which involves specific costs for which

prior written approval requirements may be imposed consistent with

applicable OMB cost principles listed in Sec. 95.27.

(i) No other prior approval requirements for specific items may be

imposed unless a deviation has been approved by OMB.

(j) When DOL makes an award that provides support for both

construction and nonconstruction work, DOL may require the recipient to

request prior written approval before making any fund or budget

transfers between the two types of work supported.

(k) For both construction and nonconstruction awards, recipients

shall notify the grant officer in writing promptly whenever the amount

of Federal authorized funds is expected to exceed the needs of the

recipient for the project period by more than $5,000 or five percent of

the award, whichever is greater. This notification shall not be

required if an application for additional funding is submitted for a

continuation award.

(l) When requesting written approval for budget revisions,

recipients shall use the budget forms that were used in the

application.

(m) Within 30 calendar days from the date of receipt of the request

for budget revisions, the grant officer shall review the request and

notify the recipient whether the budget revisions have been approved.

If the revision is still under consideration at the end of 30 calendar

days, the grant officer shall inform the recipient in writing of the

date when the recipient may expect the decision.

Sec. 95.26 Non-Federal audits.

(a) Recipients and subrecipients that are institutions of higher

education or other non-profit organizations shall be subject to the

audit requirements contained in OMB Circular A-133, ``Audits of

Institutions of Higher Education and Other Non-Profit Institutions''

and applicable provisions of DOL regulations at 29 CFR part 96.

(b) Recipients and subrecipients that are State and local

governments shall be subject to the audit requirements contained in the

Single Audit Act (31 U.S.C. 7501-7) and DOL's regulations implementing

OMB Circular A-128, ``Audits of State and Local Governments'' and

applicable provisions of DOL regulations at 29 CFR part 96.

(c) Hospitals not covered by the audit provisions of OMB Circular

A-133 shall be subject to the audit requirements of DOL. See 29 CFR

part 96.

(d) Commercial organizations shall be subject to the audit

requirements specified by the DOL awarding agency or the prime

recipient as incorporated into the award document. See 29 CFR part 96.

Sec. 95.27 Allowable costs.

For each kind of recipient, there is a set of Federal principles

for determining allowable costs. Allowability of costs shall be

determined in accordance with the cost principles applicable to the

entity incurring the costs. Thus, allowability of costs incurred by

State, local or federally-recognized Indian tribal governments is

determined in accordance with the provisions of OMB Circular A-87,

``Cost Principles for State and Local Governments.'' The allowability

of costs incurred by non-profit organizations is determined in

accordance with the provisions of OMB Circular A-122, ``Cost Principles

for Non-Profit Organizations.'' The allowability of costs incurred by

institutions of higher education is determined in accordance with the

provisions of OMB Circular A-21, ``Cost Principles for Educational

Institutions.'' The allowability of costs incurred by hospitals is

determined in accordance with the provisions of Appendix E of 45 CFR

part 74, ``Principles for Determining Costs Applicable to Research and

Development Under Grants and Contracts with Hospitals.'' The

allowability of costs incurred by commercial organizations and those

non-profit organizations listed in Attachment C to Circular A-122 is

determined in accordance with the provisions of the Federal Acquisition

Regulation (FAR) at 48 CFR part 31.

Sec. 95.28 Period of availability of funds.

Where a funding period is specified, a recipient may charge to the

grant only allowable costs resulting from obligations incurred during

the funding period and any pre-award costs authorized by DOL.

Property Standards

Sec. 95.30 Purpose of property standards.

Sections 95.31 through 95.37 set forth uniform standards governing

management and disposition of property furnished by the Federal

Government whose cost was charged to a project supported by a Federal

award. Recipients are required to observe these standards under awards

and no additional requirements shall be imposed, unless specifically

required by Federal statute. The recipient may use its own property

management standards and procedures provided it observes the provisions

of Secs. 95.31 through 95.37.

Sec. 95.31 Insurance coverage.

Recipients shall, at a minimum, provide the equivalent insurance

coverage for real property and equipment acquired with Federal funds as

provided to property owned by the recipient. Federally-owned property

need not be insured unless required by the terms and conditions of the

award.

Sec. 95.32 Real property.

DOL shall prescribe requirements for recipients concerning the use

and disposition of real property acquired in whole or in part under

awards. Unless otherwise provided by statute, such requirements, at a

minimum, shall contain the following:

(a) Title to real property shall vest in the recipient subject to

the condition that the recipient shall use the real property for the

authorized purpose of the project as long as it is needed and shall not

encumber the property without approval of DOL.

(b) The recipient shall obtain prior written approval from the

grant officer for the use of real property in other federally-sponsored

projects when the recipient determines that the property is no longer

needed for the purpose of the original project. Use in other projects

shall be limited to those under federally-sponsored projects (i.e.,

awards) or programs that have purposes consistent with those authorized

for support by DOL.

(c) When the real property is no longer needed as provided in

paragraphs (a) and (b) of this section, the recipient shall request

disposition instructions from the grant officer. The grant officer

shall issue one or more of the following disposition instructions:

(1) The recipient may be permitted to retain title without further

obligation to the Federal Government after it compensates the Federal

Government for that percentage of the current fair market value of the

property attributable to the Federal participation in the project.

(2) The recipient may be directed to sell the property under

guidelines provided by DOL and pay DOL for that percentage of the

current fair market value of the property attributable to the Federal

participation in the project (after deducting actual and reasonable

selling and fix-up expenses, if any, from the sales proceeds). When the

recipient is authorized or required to sell the property, proper sales

procedures shall be established that provide for competition to the

extent practicable and result in the highest possible return.

(3) The recipient may be directed to transfer title to the property

to the Federal Government or to an eligible third party provided that,

in such cases, the recipient shall be entitled to compensation for its

attributable percentage of the current fair market value of the

property.

Sec. 95.33 Federally-owned and exempt property.

(a) Federally-owned property.

(1) Title to federally-owned property remains vested in the Federal

Government. Recipients shall submit annually an inventory listing of

federally-owned property in their custody to DOL. Upon completion of

the award or when the property is no longer needed, the recipient shall

report the property to DOL for further Federal agency utilization.

(2) If DOL has no further need for the property, it shall be

declared excess and reported to the General Services Administration,

unless DOL has statutory authority to dispose of the property by

alternative methods (e.g., the authority provided by the Federal

Technology Transfer Act (15 U.S.C. 3710(i)) to donate research

equipment to educational and non-profit organizations in accordance

with E.O. 12821, ``Improving Mathematics and Science Education in

Support of the National Education Goals.'') Appropriate instructions

shall be issued to the recipient by DOL.

(b) Exempt property.

When statutory authority exists, DOL has the option to vest title

to property acquired with Federal funds in the recipient without

further obligation to the Federal Government and under conditions DOL

considers appropriate. Such property is ``exempt property.'' Should DOL

not establish conditions, title to exempt property upon acquisition

shall vest in the recipient without further obligation to the Federal

Government.

Sec. 95.34 Equipment.

(a) Title to equipment acquired by a recipient with Federal funds

shall vest in the recipient, subject to conditions of this section.

(b) The recipient shall not use equipment acquired with Federal

funds to provide services to non-Federal outside organizations for a

fee that is less than private companies charge for equivalent services,

unless specifically authorized by Federal statute, for as long as the

Federal Government retains an interest in the equipment.

(c) The recipient shall use the equipment in the project or program

for which it was acquired as long as needed, whether or not the project

or program continues to be supported by Federal funds and shall not

encumber the property without approval of the grant officer. When no

longer needed for the original project or program, the recipient shall

use the equipment in connection with its other federally, sponsored

activities, in the following order of priority:

(1) Activities sponsored by the DOL agency which funded the

original project, then

(2) Activities sponsored by other Federal awarding agencies.

(d) During the time that equipment is used on the project or

program for which it was acquired, the recipient shall make it

available for use on other projects or programs if such other use will

not interfere with the work on the project or program for which the

equipment was originally acquired. First preference for such other use

shall be given to other projects or programs sponsored by the DOL

agency that financed the equipment; second preference shall be given to

projects or programs sponsored by other Federal awarding agencies. If

the equipment is owned by the Federal Government, use on other

activities not sponsored by the Federal Government shall be permissible

if authorized by the grant officer. User charges shall be treated as

program income.

(e) When acquiring replacement equipment, the recipient may use the

equipment to be replaced as trade-in or sell the equipment and use the

proceeds to offset the costs of the replacement equipment subject to

the written approval of the grant officer.

(f) The recipient's property management standards for equipment

acquired with Federal funds and federally-owned equipment shall include

all of the following:

(1) Equipment records shall be maintained accurately and shall

include the following information:

(i) A description of the equipment.

(ii) Manufacturer's serial number, model number, Federal stock

number, national stock number, or other identification number.

(iii) Source of the equipment, including the award number.

(iv) Whether title vests in the recipient or the Federal

Government.

(v) Acquisition date (or date received, if the equipment was

furnished by the Federal Government) and cost.

(vi) Information from which one can calculate the percentage of

Federal participation in the cost of the equipment (not applicable to

equipment furnished by the Federal Government).

(vii) Location and condition of the equipment and the date the

information was reported.

(viii) Unit acquisition cost.

(ix) Ultimate disposition data, including date of disposal and

sales price or the method used to determine current fair market value

where a recipient compensates DOL for its share.

(2) Equipment owned by the Federal Government shall be identified

to indicate Federal ownership.

(3) A physical inventory of equipment shall be taken and the

results reconciled with the equipment records at least once every two

years. Any differences between quantities determined by the physical

inspection and those shown in the accounting records shall be

investigated to determine the causes of the difference. The recipient

shall, in connection with the inventory, verify the existence, current

utilization, and continued need for the equipment.

(4) A control system shall be in effect to insure adequate

safeguards to prevent loss, damage, or theft of the equipment. Any

loss, damage, or theft of equipment shall be investigated and fully

documented; if the equipment was owned by the Federal Government, the

recipient shall promptly notify the grant officer.

(5) Adequate maintenance procedures shall be implemented to keep

the equipment in good condition.

(6) Where the recipient is authorized or required to sell the

equipment, proper sales procedures shall be established which provide

for competition to the extent practicable and result in the highest

possible return.

(g) When the recipient no longer needs the equipment, the equipment

may be used for other activities in accordance with the following

standards. For equipment with a current per unit fair market value of

$5,000 or more, the recipient may retain the equipment for other uses

provided that compensation is made to the original DOL agency. The

amount of compensation shall be computed by applying the percentage of

Federal participation in the cost of the original project or program to

the current fair market value of the equipment. If the recipient has no

need for the equipment, the recipient shall request disposition

instructions from DOL. The DOL agency shall determine whether the

equipment can be used to meet the agency's requirements. If no

requirement exists within the DOL agency, the availability of the

equipment shall be reported to the General Services Administration by

DOL to determine whether a requirement for the equipment exists in

other Federal agencies. DOL shall issue instructions to the recipient

no later than 120 calendar days after the recipient's request and the

following procedures shall govern.

(1) If so instructed or if disposition instructions are not issued

within 120 calendar days after the recipient's request, the recipient

shall sell the equipment and reimburse DOL an amount computed by

applying to the sales proceeds the percentage of Federal participation

in the cost of the original project or program. However, the recipient

shall be permitted to deduct and retain from the Federal share $500 or

ten percent of the proceeds, whichever is less, for the recipient's

selling and handling expenses.

(2) If the recipient is instructed to ship the equipment elsewhere,

the recipient shall be reimbursed by the Federal Government by an

amount which is computed by applying the percentage of the recipient's

participation in the cost of the original project or program to the

current fair market value of the equipment, plus any reasonable

shipping or interim storage costs incurred.

(3) If the recipient is instructed to otherwise dispose of the

equipment, the recipient shall be reimbursed by the awarding agency for

such costs incurred in its disposition.

(4) The DOL agency reserves the right to transfer the title to the

Federal Government or to a third party named by the Federal Government

when such third party is otherwise eligible under existing statutes.

Such transfer shall be subject to the following standards:

(i) The equipment shall be appropriately identified in the award or

otherwise made known to the recipient in writing.

(ii) The DOL agency shall issue disposition instructions within 120

calendar days after receipt of a final inventory. The final inventory

shall list all equipment acquired with grant funds and federally-owned

equipment. If DOL fails to issue disposition instructions within the

120 calendar day period, the recipient shall apply the standards of

this section, as appropriate.

(iii) When DOL exercises its right to take title, the equipment

shall be subject to the provisions for federally-owned equipment.

Sec. 95.35 Supplies and other expendable property.

(a) Title to supplies and other expendable property shall vest in

the recipient upon acquisition. If there is a residual inventory of

unused supplies exceeding $5,000 in total aggregate value upon

termination or completion of the project or program and the supplies

are not needed for any other federally-sponsored project or program,

the recipient shall retain the supplies for use on non-Federal

sponsored activities or sell them, but shall, in either case,

compensate the Federal Government for its share. The amount of

compensation shall be computed in the same manner as for equipment.

(b) The recipient shall not use supplies acquired with Federal

funds to provide services to non-Federal outside organizations for a

fee that is less than private companies charge for equivalent services,

unless specifically authorized by Federal statute as long as the

Federal Government retains an interest in the supplies.

Sec. 95.36 Intangible property.

(a) The recipient may copyright any work that is subject to

copyright and was developed, or for which ownership was purchased,

under an award. DOL reserves a royalty-free, nonexclusive and

irrevocable right to reproduce, publish, or otherwise use the work for

Federal purposes, and to authorize others to do so.

(b) Recipients are subject to applicable regulations governing

patents and inventions, including government-wide regulations issued by

the Department of Commerce at 37 CFR part 401, ``Rights to Inventions

Made by Nonprofit Organizations and Small Business Firms Under

Government Grants, Contracts and Cooperative Agreements.''

(c) DOL has the right to:

(1) Obtain, reproduce, publish or otherwise use the data first

produced under an award.

(2) Authorize others to receive, reproduce, publish, or otherwise

use such data for Federal purposes.

(d) Title to intangible property and debt instruments acquired

under an award or subaward vests upon acquisition in the recipient. The

recipient shall use that property for the originally-authorized

purpose, and the recipient shall not encumber the property without

written approval of the grant officer. When no longer needed for the

originally authorized purpose, disposition of the intangible property

shall occur in accordance with the provisions of Sec. 95.34(g).

Sec. 95.37 Property trust relationship.

Real property, equipment, intangible property and debt instruments

that are acquired or improved with Federal funds shall be held in trust

by the recipient as trustee for the beneficiaries of the project or

program under which the property was acquired or improved. Grant

officers may require recipients to record liens or other appropriate

notices of record to indicate that personal or real property has been

acquired or improved with Federal funds and that use and disposition

conditions apply to the property.

Procurement Standards

Sec. 95.40 Purpose of procurement standards.

Sections 95.41 through 95.48 set forth standards for use by

recipients in establishing procedures for the procurement of supplies

and other expendable property, equipment, real property and other

services with Federal funds. These standards are furnished to ensure

that such materials and services are obtained in an effective manner

and in compliance with the provisions of applicable Federal statutes

and executive orders. No additional procurement standards or

requirements shall be imposed by DOL upon recipients, unless

specifically required by Federal statute or executive order or approved

by OMB.

Sec. 95.41 Recipient responsibilities.

The standards contained in this section do not relieve the

recipient of the contractual responsibilities arising under its

contract(s). The recipient is the responsible authority, without

recourse to DOL, regarding the settlement and satisfaction of all

contractual and administrative issues arising out of procurements

entered into in support of an award or other agreement. This includes

disputes, claims, protests of award, source evaluation or other matters

of a contractual nature. Matters concerning violation of statute are to

be referred to such Federal, State or local authority as may have

proper jurisdiction.

Sec. 95.42 Codes of conduct.

The recipient shall maintain written standards of conduct governing

the performance of its employees engaged in the award and

administration of contracts. No employee, officer, or agent shall

participate in the selection, award, or administration of a contract

supported by Federal funds if a real or apparent conflict of interest

would be involved. Such a conflict would arise when the employee,

officer, or agent, any member of his or her immediate family, his or

her partner, or an organization which employs or is about to employ any

of the parties indicated herein, has a financial or other interest in

the firm selected for an award. The officers, employees, and agents of

the recipient shall neither solicit nor accept gratuities, favors, or

anything of monetary value from contractors, or parties to

subagreements. However, recipients may set standards for situations in

which the financial interest is not substantial or the gift is an

unsolicited item of nominal value. The standards of conduct shall

provide for disciplinary actions to be applied for violations of such

standards by officers, employees, or agents of the recipient.

Sec. 95.43 Competition.

All procurement transactions shall be conducted in a manner to

provide, to the maximum extent practical, open and free competition.

The recipient shall be alert to organizational conflicts of interest as

well as noncompetitive practices among contractors that may restrict or

eliminate competition or otherwise restrain trade. In order to ensure

objective contractor performance and eliminate unfair competitive

advantage, contractors that develop or draft specifications,

requirements, statements of work, invitations for bids and/or requests

for proposals shall be excluded from competing for such procurements.

Awards shall be made to the bidder or offeror whose bid or offer is

responsive to the solicitation and is most advantageous to the

recipient, price, quality and other factors considered. Solicitations

shall clearly set forth all requirements that the bidder or offeror

shall fulfill in order for the bid or offer to be evaluated by the

recipient. Any and all bids or offers may be rejected when it is in the

recipient's interest to do so.

Sec. 95.44 Procurement procedures.

(a) All recipients shall establish written procurement procedures.

These procedures shall provide for, at a minimum, that paragraphs

(a)(1), (a)(2), and (a)(3) of this section apply.

(1) Recipients shall avoid purchasing unnecessary items.

(2) Where appropriate, an analysis shall be made of lease and

purchase alternatives to determine which would be the most economical

and practical procurement for the Federal Government.

(3) Solicitations for goods and services shall provide for all of

the following:

(i) A clear and accurate description of the technical requirements

for the material, product or service to be procured. In competitive

procurements, such a description shall not contain features which

unduly restrict competition.

(ii) Requirements which the bidder/offeror must fulfill and all

other factors to be used in evaluating bids or proposals.

(iii) A description, whenever practicable, of technical

requirements in terms of functions to be performed or performance

required, including the range of acceptable characteristics or minimum

acceptable standards.

(iv) The specific features of ``brand name or equal'' descriptions

that bidders are required to meet when such items are included in the

solicitation.

(v) The acceptance, to the extent practicable and economically

feasible, of products and services dimensioned in the metric system of

measurement.

(vi) Preference, to the extent practicable and economically

feasible, for products and services that conserve natural resources and

protect the environment and are energy efficient.

(b) Positive efforts shall be made by recipients to utilize small

businesses, minority-owned firms, and women's business enterprises,

whenever possible. Recipients of Federal awards shall take all of the

following steps to further this goal:

(1) Ensure that small businesses, minority-owned firms, and women's

business enterprises are used to the fullest extent practicable.

(2) Make information on forthcoming opportunities available and

arrange time frames for purchases and contracts to encourage and

facilitate participation by small businesses, minority-owned firms, and

women's business enterprises.

(3) Consider in the contract process whether firms competing for

larger contracts intend to subcontract with small businesses, minority-

owned firms, and women's business enterprises.

(4) Encourage contracting with consortiums of small businesses,

minority-owned firms and women's business enterprises when a contract

is too large for one of these firms to handle individually.

(5) Use the services and assistance, as appropriate, of such

organizations as the Small Business Administration, the Department of

Commerce's Minority Business Development Agency, and DOL's Office of

Small Business and Minority Affairs in the solicitation and utilization

of small businesses, minority-owned firms and women's business

enterprises.

(c) The type of procuring instruments used (e.g., fixed price

contracts, cost reimbursable contracts, purchase orders, and incentive

contracts) shall be determined by the recipient but shall be

appropriate for the particular procurement and for promoting the best

interest of the program or project involved. The ``cost-plus-a-

percentage-of-cost'' or ``percentage of construction cost'' methods of

contracting shall not be used.

(d) Contracts shall be made only with responsible contractors who

possess the potential ability to perform successfully under the terms

and conditions of the proposed procurement. Consideration shall be

given to such matters as contractor integrity, record of past

performance, financial and technical resources or accessibility to

other necessary resources. In certain circumstances, contracts with

certain parties are restricted by agencies' implementation of E.O.'s

12549 and 12689, ``Debarment and Suspension.'' See 29 CFR part 98.

(e) Recipients shall, on request, make available to DOL, pre-award

and procurement documents, such as request for proposals or invitations

for bids, independent cost estimates, etc., when any of the following

conditions apply:

(1) A recipient's procurement procedures or operation fails to

comply with the procurement standards in this part.

(2) The procurement is expected to exceed the small purchase

threshold fixed at 41 U.S.C. 403(11) (currently $25,000) and is to be

awarded without competition or only one bid or offer is received in

response to a solicitation.

(3) The procurement, which is expected to exceed the small purchase

threshold, specifies a ``brand name'' product.

(4) The proposed award over the small purchase threshold is to be

awarded to other than the apparent low bidder under a sealed bid

procurement.

(5) A proposed contract modification changes the scope of a

contract or increases the contract amount by more than the amount of

the small purchase threshold.

Sec. 95.45 Cost and price analysis.

Some form of cost or price analysis shall be made and documented in

the procurement files in connection with every procurement action.

Price analysis may be accomplished in various ways, including the

comparison of price quotations submitted, market prices and similar

indicia, together with discounts. Cost analysis is the review and

evaluation of each element of cost to determine reasonableness,

allocability and allowability.

Sec. 95.46 Procurement records.

Procurement records and files for purchases in excess of the small

purchase threshold shall include the following at a minimum: (a) basis

for contractor selection, (b) justification for lack of competition

when competitive bids or offers are not obtained, and (c) basis for

award cost or price.

Sec. 95.47 Contract administration.

A system for contract administration shall be maintained to ensure

contractor conformance with the terms, conditions and specifications of

the contract and to ensure adequate and timely follow up of all

purchases. Recipients shall evaluate contractor performance and

document, as appropriate, whether contractors have met the terms,

conditions and specifications of the contract.

Sec. 95.48 Contract provisions.

The recipient shall include, in addition to provisions to define a

sound and complete agreement, the following provisions in all

contracts. The following provisions shall also be applied to

subcontracts:

(a) Contracts in excess of the small purchase threshold shall

contain contractual provisions or conditions that allow for

administrative, contractual, or legal remedies in instances in which a

contractor violates or breaches the contract terms, and provide for

such remedial actions as may be appropriate.

(b) All contracts in excess of the small purchase threshold shall

contain suitable provisions for termination by the recipient, including

the manner by which termination shall be effected and the basis for

settlement. In addition, such contracts shall describe conditions under

which the contract may be terminated for default as well as conditions

where the contract may be terminated because of circumstances beyond

the control of the contractor.

(c) Except as otherwise required by statute, an award that requires

the contracting (or subcontracting) for construction or facility

improvements shall provide for the recipient to follow its own

requirements relating to bid guarantees, performance bonds, and payment

bonds unless the construction contract or subcontract exceeds $100,000.

For those contracts or subcontracts exceeding $100,000, DOL may accept

the bonding policy and requirements of the recipient, provided DOL has

made a determination that the Federal Government's interest is

adequately protected. If such a determination has not been made, the

minimum requirements shall be as follows.

(1) A bid guarantee from each bidder equivalent to five percent of

the bid price. The ``bid guarantee'' shall consist of a firm commitment

such as a bid bond, certified check, or other negotiable instrument

accompanying a bid as assurance that the bidder shall, upon acceptance

of his bid, execute such contractual documents as may be required

within the time specified.

(2) A performance bond on the part of the contractor for 100

percent of the contract price. A ``performance bond'' is one executed

in connection with a contract to secure fulfillment of all the

contractor's obligations under such contract.

(3) A payment bond on the part of the contractor for 100 percent of

the contract price. A ``payment bond'' is one executed in connection

with a contract to assure payment as required by statute of all persons

supplying labor and material in the execution of the work provided for

in the contract.

(4) Where bonds are required in the situations described herein,

the bonds shall be obtained from companies holding certificates of

authority as acceptable sureties pursuant to 31 CFR part 223, ``Surety

Companies Doing Business with the United States.''

(d) All negotiated contracts (except those for less than the small

purchase threshold) awarded by recipients shall include a provision to

the effect that the recipient, DOL, the Comptroller General of the

United States, or any of their duly authorized representatives, shall

have access to any books, documents, papers and records of the

contractor which are directly pertinent to a specific program for the

purpose of making audits, examinations, excerpts and transcriptions.

(e) All contracts, including small purchases, awarded by recipients

and their contractors shall contain the procurement provisions of

Appendix A to this part, as applicable.

Reports and Records

Sec. 95.50 Purpose of reports and records.

Sections 95.51 through 95.53 set forth the procedures for

monitoring and reporting on the recipient's financial and program

performance and the necessary standard reporting forms. They also set

forth record retention requirements.

Sec. 95.51 Monitoring and reporting program performance.

(a) Recipients are responsible for managing and monitoring each

project, program, subaward, function or activity supported by the

award. Recipients shall monitor subawards to ensure subrecipients have

met the audit requirements as delineated in Sec. 95.26.

(b) DOL shall prescribe the frequency with which performance

reports shall be submitted. Except as provided in paragraph (f) of this

section, performance reports shall not be required more frequently than

quarterly or, less frequently than annually. Annual reports shall be

due 90 calendar days after the grant year; quarterly or semi-annual

reports shall be due 30 days after the reporting period. DOL may

require annual reports before the anniversary dates of multiple-year

awards in lieu of these requirements. The final performance reports are

due 90 calendar days after the expiration or termination of the award.

(c) If inappropriate, a final technical or performance report shall

not be required after completion of the project.

(d) When required, performance reports shall generally contain, for

each award, brief information on each of the following:

(1) A comparison of actual accomplishments with the goals and

objectives established for the period, the findings of the

investigator, or both. Whenever appropriate and the output of programs

or projects can be readily quantified, such quantitative data should be

related to cost data for computation of unit costs.

(2) Reasons why established goals were not met, if appropriate.

(3) Other pertinent information including, when appropriate,

analysis and explanation of cost overruns or high unit costs.

(e) Recipients shall not be required to submit more than the

original and two copies of performance reports.

(f) Recipients shall immediately notify DOL of developments that

have a significant impact on the award-supported activities. Also,

notification shall be given in the case of problems, delays, or adverse

conditions which materially impair the ability to meet the objectives

of the award. This notification shall include a statement of the action

taken or contemplated, and any assistance needed to resolve the

situation.

(g) DOL may make site visits, as needed.

(h) DOL shall comply with clearance requirements of 5 CFR part 1320

when requesting performance data from recipients.

(Approved by the Office of Management and Budget, Approval Number

1225-0017)

Sec. 95.52 Financial reporting.

(a) The following forms or such other forms as may be approved by

OMB are authorized for obtaining financial information from recipients:

(1) SF-269 or SF-269A, Financial Status Report.

(i) Recipients shall use the SF-269, SF-269A, or other OMB-

approved forms to report the status of funds for all nonconstruction

projects or programs. DOL may, however, have the option of not

requiring the SF-269 or SF-269A when the SF-270, Request for Advance or

Reimbursement, or SF-272, Report of Federal Cash Transactions, is

determined to provide adequate information to meet its needs, except

that a final SF-269 or SF-269A shall be required at the completion of

the project when the SF-270 is used only for advances.

(ii) DOL shall prescribe whether the report shall be on a cash or

an accrual basis. If DOL requires accrual information and the

recipient's accounting records are not normally kept on the accrual

basis, the recipient shall not convert its accounting system, but shall

develop such accrual information through best estimates based on an

analysis of the documentation on hand.

(iii) DOL shall determine the frequency of the Financial Status

Report for each project or program, considering the size and complexity

of the particular project or program. However, the report shall not be

required more frequently than quarterly or less frequently than

annually. A final report shall be required at the completion of the

agreement.

(iv) Recipients shall submit to DOL the SF-269, SF-269A, or other

OMB-approved forms (an original and no more than two copies) no later

than 30 days after the end of each specified reporting period for

quarterly and semi-annual reports, and 90 calendar days for annual and

final reports. Extensions of reporting due dates may be approved by DOL

upon request of the recipient.

(2) SF-272, Report of Federal Cash Transactions.

(i) When funds are advanced to recipients, the recipient shall

submit the SF-272 and, when necessary, its continuation sheet, SF-272a.

DOL shall use this report to monitor cash advanced to recipients and to

obtain disbursement information for each agreement with the recipients.

(ii) DOL may require forecasts of Federal cash requirements in the

``Remarks'' section of the report.

(iii) When practical and deemed necessary, DOL may require

recipients to report in the ``Remarks'' section the amount of cash

advances received in excess of three days. Recipients shall provide

short narrative explanations of actions taken to reduce the excess

balances.

(iv) Recipients shall submit not more than the original and two

copies of the SF-272 15 calendar days following the end of each

quarter. The DOL agency may require a monthly report from those

recipients receiving advances totaling $1 million or more per year.

(v) DOL may waive the requirement for submission of the SF-272 for

any one of the following reasons:

(A) When monthly advances do not exceed $25,000 per recipient,

provided that such advances are monitored through other forms contained

in this section;

(B) If, in DOL's opinion, the recipient's accounting controls are

adequate to minimize excessive Federal advances; or,

(C) When the electronic payment mechanisms provide adequate data.

(b) When DOL needs additional information or more frequent reports,

the following shall be observed.

(1) When additional information is needed to comply with

legislative requirements, DOL shall issue instructions to require

recipients to submit such information under the ``Remarks'' section of

the reports.

(2) When DOL determines that a recipient's accounting system does

not meet the standards in Sec. 95.21, additional pertinent information

to further monitor awards may be obtained upon written notice to the

recipient until such time as the system is brought up to standard. DOL,

in obtaining this information, shall comply with report clearance

requirements of 5 CFR part 1320.

(3) DOL may shade out any line item on any report if not necessary.

(4) DOL may accept the identical information from the recipients in

machine readable format or computer printouts or electronic outputs in

lieu of prescribed formats.

(5) DOL may provide computer or electronic outputs to recipients

when such expedites or contributes to the accuracy of reporting.

(Approved by the Office of Management and Budget, Approval Number 1225-

0017)

Sec. 95.53 Retention and access requirements for records.

(a) This section sets forth requirements for record retention and

access to records for awards to recipients. DOL shall not impose any

other record retention or access requirements upon recipients.

(b) Financial records, supporting documents, statistical records,

and all other records pertinent to an award shall be retained for a

period of three years from the date of submission of the final

expenditure report or, for awards that are renewed quarterly or

annually, from the date of the submission of the quarterly or annual

financial report, as authorized by DOL. The only exceptions are the

following:

(1) If any litigation, claim, or audit is started before the

expiration of the 3-year period, the records shall be retained until

all litigation, claims or audit findings involving the records have

been resolved and final action taken.

(2) Records for real property and equipment acquired with Federal

funds shall be retained for 3 years after final disposition.

(3) When records are transferred to or maintained by DOL, the 3-

year retention requirement is not applicable to the recipient.

(4) Indirect cost rate proposals, cost allocations plans, etc., as

specified in paragraph (g) of this section.

(c) Copies of original records may be substituted for the original

records if authorized by DOL.

(d) DOL shall request transfer of certain records to its custody

from recipients when it determines that the records possess long term

retention value. However, in order to avoid duplicate recordkeeping,

DOL may make arrangements for recipients to retain any records that are

continuously needed for joint use.

(e) The Federal grantor awarding agency, the Inspector General, the

Comptroller General of the United States, or any of their duly

authorized representatives, have the right of timely and unrestricted

access to any books, documents, papers, or other records of recipients

that are pertinent to the awards, in order to make audits,

examinations, excerpts, transcripts and copies of such documents. This

right also includes timely and reasonable access to a recipient's

personnel for the purpose of interview and discussion related to such

documents. The rights of access in this paragraph are not limited to

the required retention period, but shall last as long as records are

retained.

(f) Unless required by statute, DOL shall not place restrictions on

recipients that limit public access to the records of recipients that

are pertinent to an award, except when DOL can demonstrate that such

records shall be kept confidential and would have been exempted from

disclosure pursuant to the Freedom of Information Act (5 U.S.C.

Sec. 552) if the records had belonged to DOL.

(g) Indirect cost rate proposals, cost allocations plans, etc.

Paragraphs (g)(1) and (g)(2) of this section apply to the following

types of documents, and their supporting records: indirect cost rate

computations or proposals, cost allocation plans, and any similar

accounting computations of the rate at which a particular group of

costs is chargeable (such as computer usage chargeback rates or

composite fringe benefit rates).

(1) If submitted for negotiation. If the recipient submits to DOL

or the subrecipient submits to the recipient the proposal, plan, or

other computation to form the basis for negotiation of the rate, then

the 3-year retention period for its supporting records starts on the

date of such submission.

(2) If not submitted for negotiation. If the recipient is not

required to submit to DOL or the subrecipient is not required to submit

to the recipient the proposal, plan, or other computation for

negotiation purposes, then the 3-year retention period for the

proposal, plan, or other computation and its supporting records starts

at the end of the fiscal year (or other accounting period) covered by

the proposal, plan, or other computation.

(Approved by the Office of Management and Budget, Approval Number 1225-

0017)

Termination and Enforcement

Sec. 95.60 Purpose of termination and enforcement.

Sections 95.61 and 95.62 set forth uniform suspension, termination

and enforcement procedures.

Sec. 95.61 Termination.

(a) Awards may be terminated in whole or in part only if paragraphs

(a) (1), (a)(2), or (a)(3) of this section apply.

(1) By grant officers, if a recipient materially fails to comply

with the terms and conditions of an award.

(2) By grant officers, with the consent of the recipient, in which

case the two parties shall agree upon the termination conditions,

including the effective date and, in the case of partial termination,

the portion to be terminated.

(3) By the recipient upon sending to the grant officer written

notification setting forth the reasons for such termination, the

effective date, and, in the case of partial termination, the portion to

be terminated. However, if the grant officer determines in the case of

partial termination that the reduced or modified portion of the grant

will not accomplish the purposes for which the grant was made, the

grant officer may terminate the grant in its entirety under either

paragraphs (a) (1) or (2) of this section.

(b) If costs are allowed under an award, the responsibilities of

the recipient referred to in Sec. 95.71(a), including those for

property management as applicable, shall be considered in the

termination of the award, and provision shall be made for continuing

responsibilities of the recipient after termination, as appropriate.

Sec. 95.62 Enforcement.

(a) Remedies for noncompliance. If a recipient materially fails to

comply with the terms and conditions of an award, whether stated in a

Federal statute, regulation, assurance, application, or notice of

award, DOL may, in addition to imposing any of the special conditions

outlined in Sec. 95.14, take one or more of the following actions, as

appropriate in the circumstances:

(1) Temporarily withhold cash payments pending correction of the

deficiency by the recipient or more severe enforcement action by DOL.

(2) Disallow (that is, deny both use of funds and any applicable

matching credit for) all or part of the cost of the activity or action

not in compliance.

(3) Wholly or partly suspend or terminate the current award.

(4) Withhold further awards for the project or program.

(5) Take other remedies that may be legally available.

(b) Hearings and appeals. In taking an enforcement action, DOL

shall provide the recipient an opportunity for hearing, appeal, or

other administrative proceeding to which the recipient is entitled

under any statute or regulation applicable to the action involved.

(c) Effects of suspension and termination. Costs of a recipient

resulting from obligations incurred by the recipient during a

suspension or after termination of an award are not allowable unless

DOL expressly authorizes them in the notice of suspension or

termination or subsequently. Other recipient costs during suspension or

after termination which are necessary and not reasonably avoidable are

allowable if paragraphs (c)(1) and (c)(2) of this section apply.

(1) The costs result from obligations which were properly incurred

by the recipient before the effective date of suspension or

termination, are not in anticipation of it, and in the case of a

termination, are noncancellable.

(2) The costs would be allowable if the award were not suspended or

expired normally at the end of the funding period in which the

termination takes effect.

(d) Relationship to debarment and suspension. The enforcement

remedies identified in this section, including suspension and

termination, do not preclude a recipient from being subject to

debarment and suspension under E.O.'s 12549 and 12689 and DOL's

implementing regulations. See Sec. 95.13 and 29 CFR part 98.

Subpart D--After-the-Award Requirements

Sec. 95.70 Purpose.

Sections 95.71 through 95.73 contain closeout procedures and other

procedures for subsequent disallowances and adjustments.

Sec. 95.71 Closeout procedures.

(a) Recipients shall submit, within 90 calendar days after the date

of completion of the award, all financial, performance, and other

reports as required by the terms and conditions of the award. DOL may

approve extensions when requested by the recipient.

(b) Unless DOL authorizes an extension, a recipient shall liquidate

all obligations incurred under the award not later than 90 calendar

days after the funding period or the date of completion as specified in

the terms and conditions of the award or in agency implementing

instructions.

(c) DOL shall make prompt payments to a recipient for allowable

reimbursable costs under the award being closed out.

(d) The recipient shall promptly refund any balances of unobligated

cash that DOL has advanced or paid and that is not authorized to be

retained by the recipient for use in other projects. OMB Circular A-129

governs unreturned amounts that become delinquent debts.

(e) When authorized by the terms and conditions of the award, DOL

shall make a settlement for any upward or downward adjustments to the

Federal share of costs after closeout reports are received.

(f) The recipient shall account for any real and personal property

acquired with Federal funds or received from the Federal Government in

accordance with Secs. 95.31 through 95.37.

(g) In the event a final audit has not been performed prior to the

closeout of an award, DOL retains the right to recover an appropriate

amount after fully considering the recommendations on disallowed costs

resulting from the final audit.

Sec. 95.72 Subsequent adjustments and continuing responsibilities.

(a) The closeout of an award does not affect any of the following:

(1) The right of DOL to disallow costs and recover funds on the

basis of a later audit or other review.

(2) The obligation of the recipient to return any funds due as a

result of later refunds, corrections, or other transactions.

(3) Audit requirements in Sec. 95.26.

(4) Property management requirements in Secs. 95.31 through 95.37.

(5) Records retention as required in Sec. 95.53.

(b) After closeout of an award, a relationship created under an

award may be modified or ended in whole or in part with the consent of

DOL and the recipient, provided the responsibilities of the recipient

referred to in Sec. 95.73(a), including those for property management

as applicable, are considered and provisions made for continuing

responsibilities of the recipient, as appropriate.

Sec. 95.73 Collection of amounts due.

(a) Any funds paid to a recipient in excess of the amount to which

the recipient is finally determined to be entitled under the terms and

conditions of the award constitute a debt to the Federal Government. If

not paid within a reasonable period after the demand for payment, DOL

may reduce the debt by paragraphs (a)(1), (a)(2), or (a)(3) of this

section.

(1) Making an administrative offset against other requests for

reimbursements.

(2) Withholding advance payments otherwise due to the recipient.

(3) Taking other action permitted by statute.

(b) Except as otherwise provided by law, DOL shall charge interest

on an overdue debt in accordance with 4 CFR Chapter II, ``Federal

Claims Collection Standards.''

Appendix A to Part 95--Contract Provisions

All contracts, awarded by a recipient including small purchases,

shall contain the following provisions as applicable:

1. Equal Employment Opportunity--All contracts shall contain a

provision requiring compliance with E.O. 11246, ``Equal Employment

Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order

11246 Relating to Equal Employment Opportunity,'' and as

supplemented by regulations at 41 CFR part 60, ``Office of Federal

Contract Compliance Programs, Equal Employment Opportunity,

Department of Labor.''

2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.

276c)--All contracts and subgrants in excess of $2000 for

construction or repair awarded by recipients and subrecipients shall

include a provision for compliance with the Copeland ``Anti-

Kickback'' Act (18 U.S.C. Sec. 874), as supplemented by Department

of Labor regulations (29 CFR part 3, ``Contractors and

Subcontractors on Public Building or Public Work Financed in Whole

or in Part by Loans or Grants from the United States''). The Act

provides that each contractor or subrecipient shall be prohibited

from inducing, by any means, any person employed in the

construction, completion, or repair of public work, to give up any

part of the compensation to which one is otherwise entitled. The

recipient shall report all suspected or reported violations to the

Federal awarding agency.

3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When

required by Federal program legislation, all construction contracts

awarded by the recipients and subrecipients of more than $2000 shall

include a provision for compliance with the Davis-Bacon Act (40

U.S.C. Sec. 276a to a-7) and as supplemented by Department of Labor

regulations (29 CFR part 5, ``Labor Standards Provisions Applicable

to Contracts Governing Federally Financed and Assisted

Construction''). Under this Act, contractors shall be required to

pay wages to laborers and mechanics at a rate not less than the

minimum wages specified in a wage determination made by the

Secretary of Labor. In addition, contractors shall be required to

pay wages not less than once a week. The recipient shall place a

copy of the current prevailing wage determination issued by the

Department of Labor in each solicitation and the award of a contract

shall be conditioned upon the acceptance of the wage determination.

The recipient shall report all suspected or reported violations to

the Federal awarding agency.

4. Contract Work Hours and Safety Standards Act (40 U.S.C.

Sec. 327-333)--Where applicable, all contracts awarded by recipients

in excess of $2,000 for construction contracts and in excess of

$2,500 for other contracts that involve the employment of mechanics

or laborers shall include a provision for compliance with sections

102 and 107 of the Contract Work Hours and Safety Standards Act (40

U.S.C. Sec. 327-333), as supplemented by Department of Labor

regulations (29 CFR part 5). Under section 102 of the Act, each

contractor shall be required to compute the wages of every mechanic

and laborer on the basis of a standard work week of 40 hours. Work

in excess of the standard work week is permissible provided that the

worker is compensated at a rate of not less than 1\1/2\ times the

basic rate of pay for all hours worked in excess of 40 hours in the

work week. Section 107 of the Act is applicable to construction work

and provides that no laborer or mechanic shall be required to work

in surroundings or under working conditions which are unsanitary,

hazardous or dangerous. These requirements do not apply to the

purchases of supplies or materials or articles ordinarily available

on the open market, or contracts for transportation or transmission

of intelligence.

5. Rights to Inventions Made Under a Contract or Agreement--

Contracts or agreements for the performance of experimental,

developmental, or research work shall provide for the rights of the

Federal Government and the recipient in any resulting invention in

accordance with 37 CFR part 401, ``Rights to Inventions Made by

Nonprofit Organizations and Small Business Firms Under Government

Grants, Contracts and Cooperative Agreements,'' and any implementing

regulations issued by the awarding agency.

6. Clean Air Act (42 U.S.C. Sec. 7401 et seq.) and the Federal

Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.), as

amended--Contracts and subgrants of amounts in excess of $100,000

shall contain a provision that requires the recipient to agree to

comply with all applicable standards, orders or regulations issued

pursuant to the Clean Air Act (42 U.S.C. Sec. 7401 et seq.) and the

Federal Water Pollution Control Act as amended (33 U.S.C. Sec. 1251

et seq.). Violations shall be reported to the Federal awarding

agency and the Regional Office of the Environmental Protection

Agency (EPA).

7. Byrd Anti-Lobbying Amendment (31 U.S.C. Sec. 1352)--

Contractors who apply or bid for an award of $100,000 or more shall

file the required certification. Each tier certifies to the tier

above that it will not and has not used Federal appropriated funds

to pay any person or organization for influencing or attempting to

influence an officer or employee of any agency, a member of

Congress, officer or employee of Congress, or an employee of a

member of Congress in connection with obtaining any Federal

contract, grant or any other award covered by 31 U.S.C. Sec. 1352.

Each tier shall also disclose any lobbying with non-Federal funds

that takes place in connection with obtaining any Federal award.

Such disclosures are forwarded from tier to tier up to the

recipient. See 29 CFR part 98.

8. Debarment and Suspension (E.O.'s 12549 and 12689)--No

contract shall be made to parties listed on the General Services

Administration's List of Parties Excluded from Federal Procurement

or Nonprocurement Programs in accordance with E.O.'s 12549 and

12689, ``Debarment and Suspension.'' This list contains the names of

parties debarred, suspended, or otherwise excluded by agencies, and

contractors declared ineligible under statutory or regulatory

authority other than E.O. 12549. Contractors with awards that exceed

the small purchase threshold shall provide the required

certification regarding its exclusion status and that of its

principal employees.

[FR Doc. 94-17974 Filed 7-26-94; 8:45 am]

BILLING CODE 4510-23-P