Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, Uniform Administrative Requirements (OMB A-110 Implementation)

Federal RegisterJul 23, 1996

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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

14 CFR Part 1260

RIN 2700-AA95

Grants and Agreements With Institutions of Higher Education,

Hospitals, and Other Non-Profit Organizations, Uniform Administrative

Requirements (OMB A-110 Implementation)

AGENCY: Office of Procurement, National Aeronautics and Space

Administration (NASA).

ACTION: Interim rule.

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SUMMARY: This rule revises NASA's grant regulations in order to adopt

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uniform administrative requirements. Institutions that receive grants

from more than one Federal agency may find it easier to follow the

format of these uniform requirements.

DATES: This rule is effective August 22, 1996. All comments on this

interim rule should be in writing and must be received by September 23,

1996.

ADDRESSES: Rich Kall, Code HK, NASA Headquarters, Washington, DC 20546.

FOR FURTHER INFORMATION CONTACT:

Rich Kall, (202) 358-0459.

SUPPLEMENTARY INFORMATION:

Background

This rule revises 14 CFR part 1260 to adopt the language of OMB

Circular No. A-110 by using a format similar to the Department of

Energy's regulation at 10 CFR part 600. A new subpart A provides the

text of provisions and special conditions for grants and cooperative

agreements and addresses NASA's authority, definitions, applicability,

amendments, publications, deviations, pre-award requirements, and post-

award requirements currently covered by 14 CFR part 1260. A new subpart

B adopts the uniform administrative requirements of OMB Circular No. A-

110 and includes NASA's choices in alternatives offered by A-110.

Because A-110 was already published for public comment, NASA's adoption

of the language is being done as an interim rule. NASA has added

subpart C, Administrative Requirements for State and Local Governments

(formerly in OMB Circular A-102 and currently in the agencies' Grants

Management Common Rule), which has been codified at 14 CFR part 1273,

FR 33694, 6-29-95.

Procedural Requirements

Review Under the Regulatory Flexibility Act

The rule was reviewed under the Regulatory Flexibility Act of 1980.

NASA certifies that the rule will not have a significant economic

impact on a substantial number of small entities.

Review Under the Paperwork Reduction Act

Under 5 CFR 1320.5(b)(2)(i), NASA is required to inform potential

persons who are to respond to the collection of information that such

persons are not required to respond to the collection of information

unless it displays a currently valid OMB control number. Under 5 CFR

1320.5(b)(2)(ii)(C), this paragraph meets that display requirement by

providing the following statement: information collection under 14 CFR

part 1260 is not changed by this rule and was previously approved under

OMB Control Numbers 2700-0047, 2700-0048, and 2700-0049.

Executive Order 12866

NASA has determined that this rule is significant under E.O. 12866.

This regulation is needed because OMB Circular No. A-110 encourages

agencies to adopt uniform administrative requirements for grants. The

regulation meets that need by adopting the requirements of A-110. The

potential costs and benefits of the regulatory action are that

institutions that receive grants from more than one Federal agency may

find it easier to follow the format of these uniform requirements.

These requirements implement several Federal statutes applicable to

grants, e.g., civil rights, clean air and water, and drug-free

workplace.

List of Subjects in 14 CFR Part 1260

Grant programs.

Tom Luedtke,

Deputy Associate Administrator for Procurement.

Accordingly, 14 CFR part 1260 is revised to read as follows:

PART 1260--GRANTS AND COOPERATIVE AGREEMENTS

Subpart A--General

Sec.

1260.1 Authority.

1260.2 Definitions.

1260.3 Applicability.

1260.4 Amendment.

1260.5 Publication.

1260.6 Deviations.

Pre-Award Requirements

1260.10 Proposals.

1260.11 Evaluation and selection.

1260.12 Choice of award instrument.

1260.13 Award procedures.

1260.14 Limitations.

1260.15 Format and numbering.

1260.16 Distribution.

Provisions

1260.20 Provisions.

1260.21 Publications and reports.

1260.22 Extensions.

1260.23 Termination and enforcement.

1260.24 Change in principal investigator or scope.

1260.25 Allowable costs.

1260.26 Financial management.

1260.27 Equipment and other property.

1260.28 Patent rights.

1260.29 Rights in data.

1260.30 National security.

1260.31 Nondiscrimination.

1260.32 Subcontracts.

1260.33 Clean air and water.

1260.34 Procurement standards.

1260.35 Foreign national employee investigative requirements.

1260.36 Travel and transportation.

Special Conditions

1260.50 Special conditions.

1260.51 Cooperative agreement special condition.

1260.52 Multiple year grant.

1260.53 Incremental funding.

1260.54 Cost sharing.

1260.55 Reports substitution.

1260.56 Withholding.

1260.57 Training grant reports.

1260.58 Interest bearing accounts.

1260.59 Choice of law.

1260.60 Invention reporting and rights.

1260.61 Public information.

1260.62 Allocation of risk/liability.

1260.63 Payment--to foreign organizations.

1260.64 Customs clearance and visas.

1260.65 Taxes.

1260.66 Exchange of technical data and goods.

Post-Award Requirements

1260.70 Delegation of administration.

1260.71 Supplements and renewals.

1260.72 Adherence to original budget estimates.

1260.73 Transfers, novations, and change of name agreements.

1260.74 Property use, disposition, and vesting of title.

1260.75 Reports.

1260.76 Suspension or termination.

1260.77 Closeout procedures.

Appendix to Subpart A to Part 1260--Listing of Exhibits

Subpart B--Uniform Administrative Requirements for Grants and

Cooperative Agreements With Institutions of Higher Education,

Hospitals, and Other Non-Profit Organizations

General

Sec.

1260.101 Purpose.

1260.102 Definitions.

1260.103 Effect on other issuances.

1260.104 Deviations.

1260.105 Subawards.

Pre-Award Requirements

1260.110 Purpose.

1260.111 Pre-award policies.

1260.112 Forms for applying for Federal assistance.

1260.113 Debarment and suspension.

1260.114 Special award conditions.

1260.115 Metric system of measurement.

1260.116 Resource Conservation and Recovery Act (RCRA).

1260.117 Certifications and representations.

Post-Award Requirements

Financial and Program Management

1260.120 Purpose of financial and program management.

1260.121 Standards for financial management systems.

1260.122 Payment.

1260.123 Cost sharing or matching.

1260.124 Program income.

1260.125 Revision of budget and program plans.

1260.126 Non-Federal audits.

1260.127 Allowable costs.

1260.128 Period of availability of funds.

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Property Standards

1260.130 Purpose of property standards.

1260.131 Insurance coverage.

1260.132 Real property.

1260.133 Federally-owned and exempt property.

1260.134 Equipment.

1260.135 Supplies and other expendable property.

1260.136 Intangible property.

1260.137 Property trust relationship.

Procurement Standards

1260.140 Purpose of procurement standards.

1260.141 Recipient responsibilities.

1260.142 Codes of conduct.

1260.143 Competition.

1260.144 Procurement procedures.

1260.145 Cost and price analysis.

1260.146 Procurement records.

1260.147 Contract administration.

1260.148 Contract provisions.

Reports and Records

1260.150 Purpose of reports and records.

1260.151 Monitoring and reporting program performance.

1260.152 Financial reporting.

1260.153 Retention and access requirements for records.

Termination and Enforcement

1260.160 Purpose of termination and enforcement.

1260.161 Termination.

1260.162 Enforcement.

After-the-Award Requirements

1260.170 Purpose.

1260.171 Closeout procedures.

1260.172 Subsequent adjustments and continuing responsibilities.

1260.173 Collection of amounts due.

Appendix A to Subpart B of Part 1260--Contract Provisions

Authority: 42 U.S.C. 2473(c)(1), Pub. L. 97-258, 96 Stat. 1003

(31 U.S.C. 6301 et seq.), and OMB Circular A-110.

Subpart A--General

Sec. 1260.1 Authority.

(a) The National Aeronautics and Space Administration (NASA) awards

grants and cooperative agreements under the authority of 42 U.S.C.

2473(c)(5), the Space Act. This part 1260 is issued under the authority

of 42 U.S.C. 2473(c)(1).

(b) The Office of Management and Budget (OMB) approved information

collection under the Paperwork Reduction Act through September 30, 1998

and assigned OMB control numbers 2700-0047, Property Management and

Control; 2700-0048, Patents; and 2700-0049, Financial Management and

Control. OMB control number 2700-0047 applies to grants subject to

subparts A and B of this part.

Sec. 1260.2 Definitions.

Additional definitions can be found in Sec. 1260.102.

Administrative grant officer. A Federal employee delegated

responsibility for grant administration; e.g., under a delegation from

a NASA grant officer.

Effective date. The date work can begin and the recipient can start

spending grant funds. The effective date could be earlier or later than

the date of signature on a basic award or modification.

Extension. A modification of an award, which would otherwise

expire, to provide additional time, and if appropriate, additional

funds for completion of project activities.

Grant specialist. A Government employee who is assigned the

responsibility of negotiating and/or administering grants.

Historically Black Colleges and Universities. Institutions

determined by the Secretary of Education to meet the requirements of 34

CFR 608.2 and listed therein.

Minority educational institution. An institution determined by the

Secretary of Education to meet the requirements of 34 CFR 637.4.

Multiple year grant. A grant for which NASA obligates funds for an

initial period and states an intention to obligate funds for one or

more additional periods. The initial period together with the unfunded

periods exceeds one year (see Sec. 1260.13(b)).

Non-profit organization. An organization that qualifies for the

exemption from taxation under Sec. 501 of the Internal Revenue Code of

1954, as amended, 26 U.S.C. 501.

Performance Report. A concise statement of work accomplished during

the report period (see Sec. 1260.75(e)).

Provision. A term or condition applicable to grants awarded under

this part 1260 (see Sec. 1260.20).

Recipient acquired equipment. Equipment purchased or fabricated

with grant funds by a recipient for the performance of work under its

grant.

Small business concern. A concern, including its affiliates, which

is independently owned and operated, not dominant in the field of

operation in which it is bidding, and qualifies as a small business

under the criteria and size standards in 13 CFR part 121.

Small disadvantaged business concern. A small business concern

owned and controlled by individuals who are both socially and

economically disadvantaged (within the meaning of Sec. 8(a (5) and (6)

of the Small Business Act, as amended; 15 U.S.C. 637(a (5) and (6); and

13 CFR 24).

Special condition. A term or condition that is not applicable to

all grants or is temporary in nature (see Sec. 1260.50).

Summary of Research. A document summarizing the results of the

entire project, which includes bibliographies, abstracts, and lists of

other media in which the research was discussed (see

Sec. 1260.75(f)(1)).

Supplement. The document NASA uses to effect changes and renewals

to grants and cooperative agreements. They can be awarded unilaterally

at the discretion of the grant officer.

Women-owned small business concern. A small business concern that

is at least 51 percent owned by women who are U.S. citizens and who

also control and operate the business (15 U.S.C. 637(d)).

Sec. 1260.3 Applicability.

Subparts A and B of this part 1260 establish policies and

procedures for all grants and cooperative agreements awarded by NASA to

educational institutions and other non-profit organizations.

Sec. 1260.4 Amendment.

This part 1260 will be amended by publication of changes in the

Federal Register. Changes that require immediate dissemination may be

issued as Grant Notices.

Sec. 1260.5 Publication.

(a) The NASA Grant and Cooperative Agreement Handbook is published

as part 1260 of title 14 of the Code of Federal Regulations (CFR).

(b) Subscriptions to the NASA Grant and Cooperative Agreement

Handbook may be purchased from the Superintendent of Documents, United

States Government Printing Office, Washington, DC 20402, telephone

number (202) 512-1800. Requests should cite GPO Subscription Stock No.

933-001-00000-8. A subscription consists of the basic edition, plus all

changes issued for an indefinite period.

Sec. 1260.6 Deviations.

(a) A deviation is required for any of the following.

(1) When a prescribed provision (but not a special condition) set

forth verbatim in this part 1260 is modified or omitted.

(2) When a provision is set forth in this part 1260, but not for

use verbatim, and the Center substitutes a provision which is

inconsistent with the intent, principle, and substance of the

provision.

(3) When a form prescribed by this part 1260 is altered or another

form is used in its place.

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(4) When limitations, imposed by this handbook upon the use of a

grant provision, form, procedure, or any other grant action, are

changed.

(5) When a form is created for recipient use that constitutes a

``Collection of Information'' within the meaning of the Paperwork

Reduction Act (44 U.S.C. 35) and its implementation in 5 CFR part 1320.

(b) Requests for authority to deviate from this part 1260 shall be

submitted to the Office of Procurement, NASA Headquarters, Contract

Management Division (Code HK). Requests, signed by the Procurement

Officer, shall contain:

(1) A full description of the deviation, the circumstances in which

it will be used, and identification of the requirement from which a

deviation is sought;

(2) The rationale for the request, pertinent background

information, and the intended effect of the deviation;

(3) The name of the recipient, identification of the grant

affected, and the dollar value;

(4) A statement as to whether the deviation has been requested

previously, and, if so, details of that request; and

(5) A copy of legal counsel's concurrence or comments.

110 (Subpart B of this part), Code HK will process all necessary

documents in accordance with Sec. 1260.104.

Pre-Award Requirements

Sec. 1260.10 Proposals.

(a) A grant can result from:

(1) An NRA, AO, CAN or BAA. A proposal submitted in response to a

broad agency announcement (BAA) such as a NASA Research Announcement

(NRA), Announcement of Opportunity (AO), Cooperative Agreement Notice

(CAN), an agencywide program announcement such as the Graduate Student

Research Program, or after approval by the Associate Administrator for

Procurement or designee. NRA's and BAA's are described in the NASA FAR

Supplement (NFGS) 48 CFR part 1835. AO's are described in 48 CFR part

1870, subpart 1870.1.

(2) An unsolicited proposal. Guidance on unsolicited proposals is

contained in the Federal Acquisition Regulation (FAR) 48 CFR subpart

15.5 and NFS 48 CFR subpart 1815.5. The synopsis requirement in FAR 48

CFR 15.507(b)(4), however, does not apply to the grant process. Contact

with NASA technical personnel prior to proposal submission is

encouraged to determine if preparation of a proposal is warranted.

These discussions should be limited to understanding NASA research

needs and do not jeopardize the unsolicited status of any subsequently

submitted proposal.

(b) The proposal shall contain a detailed narrative description of

the work to be undertaken, including the objectives of the project and

the applicant's plan for carrying it out.

(1) Budget content. All proposals shall include budget data as

prescribed in the Budget Summary in Exhibit C of the appendix to this

subpart A of this part 1260. Narrative detail must support the budgets

as designated in Exhibit C to Appendix to this subpart.

(i) Cost issues. The recipient institution is responsible for

ensuring that costs charged are allowable, allocable, and reasonable

under the applicable cost principles governed by OMB Circular Nos. A-21

and A-122. For other details see Sec. Sec. 1260.25 and 1260.127.

(ii) Indirect Costs. Subject to applicable cost principles, rates

are negotiated between recipients and the cognizant agencies assigned

under OMB Circular No. A-21. NASA is required to apply the negotiated

rate for all grants awarded.

(iii) Cost sharing. NASA may accept cost sharing when voluntarily

offered, and all awards including cost-sharing are subject to

Sec. Sec. 1260.13(c) and 1260.123. The amount of cost sharing will not

be a factor in determining whether to select a proposal for award.

However, recipients may be requested to secure nonfederal matching

funds equal to the program portion to training and education grants.

(2) Multiple year grants. In accordance with NASA policy to foster

continuity of research, multiple year grant proposals are encouraged,

where appropriate, for a period generally up to three years. Continuing

research programs will be subject to peer evaluation at least once

every three years. Proposals for multiple year grants shall describe

the entire research project and include a complete budget for year one

and separate estimates for each subsequent year (see Sec. 1260.13(b)).

Sec. 1260.117, as follows.

(1) Civil rights requirements. Annually, recipients must furnish

assurances on NASA Form 1206 of compliance with civil rights statutes

specified in 14 CFR parts 1250 through 1252.

(2) Debarment and suspension, drug-free workplace, and lobbying.

NASA grants are subject to the provisions of: 14 CFR part 1265,

Governmentwide Debarment and Suspension (Nonprocurement);

Governmentwide requirements for Drug-Free Workplace (Grants), unless

excepted by Sec. 1265.110 or Sec. 1265.610; and 14 CFR part 1271 ``New

Restrictions on Lobbying.'' These certifications are required to be

submitted with each proposal, including extensions. NASA does not

require any particular form or format, but does require specific

language.

Sec. 1260.11 Evaluation and selection.

(a) General. Technical evaluation of proposals will be conducted by

the cognizant NASA technical office and may be based on peer reviews.

(b) Under NRA's, AO's, CAN's, and other BAA's. The selecting

official will furnish the grant officer a signed selection statement

and a technical evaluation based on the evaluation criteria stated in

the NRA, AO, CAN, or BAA. If a proposal is not selected, the proposer

will be notified in accordance with the NRA, AO, CAN, or BAA.

proposals must consider:

(i) If the subject of the proposal is available to NASA from

another source without restriction.

(ii) If the proposal closely resembles a pending competitive

acquisition or a current, open BAA's under which the unsolicited

proposal could be evaluated.

(iii) If the research proposed demonstrates an innovative and

unique method, approach, or concept.

(iv) The proposals overall scientific or technical merit.

(v) The potential contribution to NASA's mission.

(vi) The offeror's capabilities, related experience, facilities,

techniques, or unique combinations of these which are integral factors

for achieving the proposal objectives.

(vii) The qualifications, capabilities, and experience of the

proposed principal investigator, team leader, or key personnel who are

critical in achieving the proposal objectives.

(2) An unsolicited proposal recommended for acceptance shall be

supported by a Justification for Acceptance of an Unsolicited Proposal

(JAUP) prepared by the cognizant technical office. The JAUP shall be

submitted for the approval of the grant officer after review and

concurrence at a level above the technical officer. The grant officer's

signature on the award document will indicate approval.

(3) NASA will promptly notify in writing each organization that

submitted a proposal that will not be funded.

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Proposals will be returned only when requested.

(d) Equipment justification or travel justification. These

documents will be submitted by the technical office for grant officer

approval when more than half of the proposed budget is for equipment or

travel and associated indirect cost. The justification shall describe

the extent to which the equipment or travel is necessary.

(3) Proposal budget evaluation. (1) The technical officer will

review the budget for conformance to program requirements and fund

availability, indicating the results of this review in Column B of the

proposed budget.

(2) The grant officer will review the budget, and any changes made

by the technical officer, to identify any item which may be unallowable

under the cost principles, or which appear unreasonable or unnecessary.

The grant officer will complete Column C of the proposed budget after

discussing significant changes with the recipient. Any request for

details should be limited.

(f) Incremental funding. NASA reserves the right to either fully

fund or incrementally fund grants. Grants with anticipated annual

funding exceeding $50,000 may be funded for less than the amount stated

in the proposal, provided:

(1) Two increments per grant year are authorized. The second

increment will be the balance of funding for the year.

(2) The special condition Sec. 1260.53, Incremental Funding, is

included in the grant.

(g) Printing, binding, and duplicating. Proposals for efforts that

involve printing, binding, and duplicating in excess of 25,000 pages

are subject to the Government Printing and Binding Regulations, No. 26,

February 1990, S. Pub. 101-9, U.S. Government Printing Office,

Washington, DC 20402, (202) 512-1800, published by the Congressional

Joint Committee on Printing. The technical office will refer such

proposals to the Installation Central Printing Management Officer

(ICPMO). The grant officer will be advised in writing of the results of

the ICPMO review.

(h) Rights in data. Section 1260.29 is adequate only for grants for

basic or applied research where the principal purpose (or only expected

NASA involvement) is the publication or dissemination of the results,

such as in journals or NASA publications (see Sec. 1260.21).

(i) Clean Air and Federal Water Pollution Control Acts.

(1) By accepting a grant that contains Sec. 1260.33, the recipient

agrees that the expenditure of grant funds is in compliance with the

Acts.

(2) The Administrator may approve exemptions from this prohibition

under certain circumstances under E.O. 11738. Requests for exemptions

or renewals thereof shall be made to the Office of Procurement, NASA

Headquarters, Contract Management Division (Code HK), Washington, DC

20546.

Sec. 1260.12 Choice of award instrument.

(a) This section and Sec. 1260.111 provide guidance on the

appropriate choice of award instruments consistent with 31 U.S.C. 6301

to 6308. Throughout Sec. 1260.12, the term ``grant'' does not include

``cooperative agreements.''

(b) A procurement contract is a mutually binding legal relationship

obligating the seller to furnish supplies or services (including

construction), and the buyer pays for them.

(1) The principal purpose of a procurement contract is to acquire,

for NASA's direct use or benefit, a well-defined, specific effort

clearly required for the accomplishment of a scheduled NASA mission or

project.

(2) If it is determined that a procurement contract is the

appropriate type of funding instrument to meet NASA's purposes, the

procurement shall be conducted under the FAR and the NFS.

relationship between NASA and a recipient whenever the principal

purpose is the transfer of a thing of value to the recipient to

accomplish a public purpose of support or stimulation authorized by

Federal statute. The following general characteristics meet the

statutory criteria for use of a grant:

(1) Substantial involvement is not expected between NASA and the

recipient when carrying out the activity.

(2) The exact course of the work and its outcome cannot be defined

precisely and specific points in time for achievement of significant

results cannot be realistically specified.

(3) Simplicity and economy in execution and administration are

mutually desirable.

(4) Grants are distinguished from contracts in that grants provide

financial or other tangible assistance to the recipient to carry on a

fairly autonomous research program.

(d) The following defines various types of NASA grants:

(1) A research grant is used to accomplish a NASA objective through

stimulating or supporting the acquisition of knowledge or understanding

of the subject or phenomena under study, or attempting to determine and

exploit the potential of scientific discoveries or improvements in

technology, materials, processes, methods, devices, or techniques and

advance the state of the art.

(i) The research requires long term support (i.e., in excess of one

year) for the study to mature to maximum scientific effectiveness (this

does not preclude shorter-term grants;

(ii) NASA desires, or the nature of the proposed investigation is

such, that the recipient will bear prime responsibility for the conduct

of research, and exercises judgment and original thought toward

attaining the scientific goals within broad parameters of the research

areas proposed and the resources provided;

(iii) Meaningful technical reports (as distinguished from

Performance Reports) can be prepared only as new findings are made,

rather than on a predetermined time schedule.

(2) An education grant is an agreement that provides funds to an

educational institution or other nonprofit organizations within one or

more of the following areas:

(i) Capturing student interest and/or improving student performance

in science, mathematics, technology, or related fields;

(ii) Enhancing the skill, knowledge, or ability of teachers or

faculty members in science, mathematics, or technology;

(iii) Supporting national educational reform movements;

(iv) Conducting pilot programs or research to increase

participation and/or to enhance performance in science, mathematics, or

technology education at all levels; and

(v) Developing instructional materials (e.g., teacher guides,

printed publications, computer software, and videotapes) or networked

information services for education.

(3) A training grant is an agreement that provides funds to an

educational institution or other non-profit organization solely by

providing scholarships, fellowships, or stipends to students, teachers,

and/or faculty.

(i) NASA training grants are awarded to colleges, universities, or

other non-profit organizations; not to individual students, teachers,

or faculty members. It is the responsibility of the institution

receiving the grant to approve the faculty, teachers, and/or students

who will participate in the specific program, in cooperation with NASA.

If a student, teacher, or faculty member ceases to participate in the

program for any reason, the institution, with prior NASA approval, may

appoint another student, teacher, or faculty member to complete

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the remaining portion of the grant period. Replacement students,

teachers, and/or faculty electing to apply for the following program

year are not automatically entitled to an award and are subject to the

evaluation/selection procedures administered to new applicants. Any

participant receiving support under a NASA training grant may not

concurrently hold another Federal fellowship or traineeship.

(ii) No applicant shall be denied consideration or appointment on

the grounds of race, creed, color, national origin, age, sex, or

disability.

(iii) Students and faculty receiving direct support under a NASA

training grant must be U.S. citizens.

(iv) Duration of the award is program specific. Refer to program

policies and procedures for details. Renewal is contingent upon a

successful performance evaluation as prescribed by the program,

concurrence by the NASA technical officer, and the availability of

funds.

(v) No substantial involvement is expected between NASA and the

recipient. A student or faculty member receiving support under a NASA

training grant does not incur any formal obligation to the Government.

(vi) Unused funds may be carried over into the following program

year without further NASA approval. This carry-over amount need not be

shown in the budget for the next program year.

(vii) The use of training grant funds to acquire equipment,

passenger carrying vehicles, land (or any interest therein), or to

acquire or construct facilities will not be permitted. Government

furnished equipment will not be provided.

(viii) All foreign travel must be clearly essential to the research

effort and must, to be charged to a grant, have the prior written

approval of the NASA technical officer and the grant officer for each

trip, regardless of its inclusion in the proposal budget.

(ix) An Administrative Report must be submitted under the

guidelines described by the specific program policies and procedures.

(4) A facilities grant can be issued by NASA under the authority of

the Space Act, 42 U.S.C. 2473(c)(5). It is used to provide for the

acquisition, construction, use, maintenance, and disposition of

facilities. Facilities, as used in this subpart, means property used

for production, maintenance, research, development, or testing.

(i) Prior approval by the Associate Administrator of Procurement

and a review by legal counsel to assure legal sufficiency are required.

It is unlikely an award will be made unless Congressionally mandated.

(ii) To obtain approval, prior to proceeding with the award a

package will be forwarded to the Director, Contract Management Division

(HK), that includes pertinent background information, detailed

rationale for the request, dollar value, and name of the recipient.

(e) A cooperative agreement shall be used as the legal instrument

to reflect a relationship between NASA and a recipient whenever the

principal purpose is the transfer of a thing of value to the recipient

to accomplish a public purpose of support or stimulation authorized by

Federal statute and substantial involvement is expected between NASA

and the recipient during performance of the contemplated activity.

Under 31 U.S.C. 6305, characteristics inherent in a cooperative

agreement include those that apply to a grant, plus the following:

(1) Substantial NASA involvement in and contribution to the

technical aspects of the effort are necessary for its accomplishment.

This could involve an active NASA role in collaborative relations,

access to a NASA site or equipment, or sharing NASA facilities and

personnel;

(2) The project, conducted as proposed, would not be possible

without extensive NASA-recipient technical collaboration;

(3) The nature of the collaboration can be clearly defined and

specified in advance (special provision Sec. 1260.51 shall be used).

Cooperative agreements would be appropriate, for instance, where a

university investigator works for a substantial amount of time at a

NASA Center (or a NASA investigator works at a university), or when the

collaboration is such that a jointly authored report or education

curriculum product is appropriate.

(f) Grants and cooperative agreements with foreign organizations

are awarded under the authority of the Space Act, 42 U.S.C. 2473(c)(5).

(1) Before initiating action, the grant officer shall coordinate

with the Headquarters Office of External Relations, International

Relations Division (Code IR). Grants to other than foreign government

institutions require a review by the Office of General Counsel.

(2) It is NASA policy that, in general, research will be

accomplished on a no-exchange-of-funds basis with foreign entities. In

these cases, NASA enters into agreements undertaking projects of

international scientific collaboration. In rare instances, NASA may

enter into an international agreement under which funds will be

transferred to a foreign recipient.

Sec. 1260.13 Award procedures.

(a) Multiple year grant. NASA policy is to make maximum use of

multiple year grants to support research projects that may span several

years.

(1) At the time a research proposal is recommended for award, a

decision will be made whether to award a multiple year grant. Special

condition Sec. 1260.52, Multiple Year Grant, would be included at

award.

(i) For the periods approved in Sec. 1260.52, neither a new

proposal nor another technical evaluation is required unless a special

need for review is indicated through monitoring the project and its

reports, by the introduction of work outside the scope of the approved

proposal, or by the need for substantial unanticipated funding.

(ii) A funded extension beyond the period listed in Sec. 1260.52

may be made by using the provision Sec. 1269.22, Extensions. This

requires the submission of a new proposal, subject to full review as

discussed in Secs. 1260.11 and 1260.71(b), plus consideration of the

timely submission of reports as required in Sec. 1260.21.

(2) Normally, each year of a multiple year grant will be funded at

the approximate level in the original award instrument. However, NASA

program constraints and developments within the project may dictate

adjustment in the originally anticipated level. When the actual differs

from the planned funding, the technical officer shall mark up Column B

of the budget summary and send it to the grant officer with an

explanation. The recipient may rebudget under the grant provisions to

keep the project within the funding actually provided.

(b) Annual grant. Grants may be awarded for a short term (e.g., on

an annual basis) and may be extended, if appropriate, as described in

Sec. 1260.71. Extensions should be executed prior to the grant

expiration date.

benefit from grants, other than conducting the research. Cost sharing

based on mutuality of interest applies to NASA grants where the grant

officer has reason to believe that the recipient will benefit from the

research results through sales to non-Federal entities (see

Sec. 1260.123) When cost sharing is used, the grant officer shall use a

Special Condition substantially as shown in Sec. 1260.54.

(d) Partial support. NASA may provide partial support for a

research project or conference where additional funding may be provided

by other Federal agencies. If the grant also involves cost sharing by

the recipient,

[[Page 38064]]

the grant officer will ensure that Sec. 1260.54 applies only to the

non-Federal funding.

Sec. 1260.14 Limitations.

(a) As a matter of policy, NASA does not award grants to commercial

firms. However, Cooperative Agreements may be awarded to commercial

firms in accordance with Sec. 1260.300.

(b) NASA does not award grants for donative assistance purposes,

but only to meet program objectives. Research in any academic

discipline related to NASA interests normally will qualify. However,

advice of legal counsel should be sought in unusual situations, or when

unusual project activities or organizational attributes are evident.

cooperative agreements shall not be used (except for no-cost

extensions). Loans of Government personal property not associated with

a contract, grant, or cooperative agreement under 31 U.S.C. 6301 to

6308, and made under the Space Act of 1958, should be consummated as

loan agreements.

(d) Grants and cooperative agreements shall not be used as legal

instruments for consulting service arrangements (see 48 CFR subpart

37.2 (FAR) and 48 CFR subpart 18237.2 (NFS)).

Sec. 1260.15 Format and numbering.

(a) General, A grant shall be brief, containing only those

provisions and special conditions necessary to protect the interests of

the Government.

(b) Formats. Those shown in Exhibit B of the appendix to this

subpart A shall be used for the award of all NASA grants and

cooperative agreements. Computer-generated versions are allowed.

Provisions for grants with U.S. organizations shall be incorporated by

reference, and preprinted checklists may be used. Special conditions

and provisions for grants with foreign organizations will be printed in

full text. An acceptance block may be added when the grant officer

finds it necessary to require bilateral execution of the grant. When

attaching detailed budgets, salaries will not be revealed.

education, and facilities grants, numbering shall conform to NFS 48 CFR

1804.7102-3, except that a NAG prefix will be used in lieu of the NAS

prefix The prefix designation will include the Center Identification

Number; e.g., NAG5 would be the Goddard prefix designation. They will

be sequentially numbered.

(2) Cooperative agreements will use the prefix NCC plus the Center

Identification Number. They will be sequentially numbered.

(3) Training grants will use the prefix NGT plus the Center

Identification Number. They will be sequentially numbered.

(4) The Catalog of Federal Domestic Assistance (CFDA) Numbers does

not apply to NASA grants.

Sec. 1260.16 Distribution.

Copies of grants and supplements will be provided to: payment

offices (original copy); technical officers; administrative grant

officers when delegated; the NASA Center for AeroSpace Information

(CASI), Attn: Document Processing Section, 800 Elkridge Landing Road,

Linthicum Heights, Maryland 21090-2934; and other appropriate offices.

The statement of work accepted by NASA and a copy of the approved

budget will be provided to the administrative grant officers. CASI will

also receive the statement of work. The file will record the addresses

for distribution.

Provisions

Sec. 1260.20 Provisions.

(a) The provisions set forth in Secs. 1260.21 through 1260.37 shall

be incorporated by reference and made a part of NASA research grants,

education grants, and cooperative agreements with U.S. educational

institutions and nonprofit organizations.

(b) In training grants, the provisions of the following section

will be incorporated: Secs. 1260.22, 1260.23, 1260.25, 1260.26, 126.28,

1260.29, 1260.31, and 1269.35.

case basis.

(d) In research grants awarded to foreign organizations, the

provisions of the following sections, modified as necessary, will be in

full text: Secs. 1260.21, 1260.22, 1260.23, 120.24, 1260.26, 1260.27,

1260.32, and 1260.36. References will not be used to handbooks,

statutes, or other regulations which the recipient may neither have

access to or can realistically be expected to comply.

(e) Whenever the word ``grant'' appears in sections Secs. 1260.21

through 1260.38, it shall be deemed to include, as appropriate, the

term ``cooperative agreement''.

(f) Section 1260.148 and Appendix A to subpart B to part 1260

address provisions to be used in contracts awarded by recipients.

Sec. 1260.21 Publications and reports.

Publications and Reports (July 1996)

(a) NASA encourages the widest practicable dissemination of

research results at any time during the course of the investigation.

All information disseminated as a result of the grant shall contain

a statement which acknowledges NASA's support and identifies the

grant by number (e.g., ``The material is based upon work supported

by NASA under award No(s) ________'').

(b) Reports shall be in the English language, informal in

nature, and ordinarily not exceed three pages (not counting

bibliographies, abstracts, and lists of other media). The recipient

shall submit the following reports:

(1) A Performance Report for all but the final year of the

grant. Each report is due 60 days before the anniversary date of the

grant and shall briefly describe what was accomplished during the

reporting period as outlined in Sec. 1260.151(d). A special

provision specifying more frequent reporting may be required.

(2) A Summary of Research (or Educational Activity Report in the

case of Education Grants) is due within 90 days after the expiration

date of the grant, regardless of whether or not support is continued

under another grant. This report shall be comprehensive summary of

significant accomplishments during the duration of the grant.

Activity Reports shall include the following on the first page:

(1) Title of the grant.

(2) Type of report.

(3) Name of the principal investigator.

(4) Period covered by the report.

(5) Name and address of the recipient's institution.

(6) Grant number.

(e) Performance Reports, Summaries of Research, and Education

Activity Reports shall be distributed as follows:

(1) The Original to the administration grant officer, with a

notice to the grant officer that a report was sent.

(2) One copy, in both hard copy and electronic format, to the

technical officer.

(f) For Summaries of Research and published reports, one Micro-

reproducible copy shall be sent to the NASA Center for AeroSpace

Information (CASI), Attn: Accessioning Department, 800 Elkridge

Landing Road, Linthicum Heights, Maryland 21090-2934.

Sec. 1260.22 Extensions.

Extensions (July 1996)

(a) It is NASA policy to provide maximum possible continuity in

funding grant--supported research and educational activities,

therefore, grants may be extended for additional periods of time.

Any extension requiring additional funding should be supported by a

proposal submitted at least three months is advance of the

expiration date of the grant.

(b) Recipients may extend the expiration date of a grant if

additional time beyond the established expiration date is required

to assure adequate completion of the original scope of work within

the funds already made available. For this purpose, in accordance

with Sec. 1260.125(e)(2), the recipient may unilaterally make a one-

time no-cost

[[Page 38065]]

extension, not to exceed 12 months, prior to the established

expiration date. Written notification of such an extension, with the

supporting reasons, must be received by the grant officer at least

ten days prior to the expiration of the award.

30 days) must be submitted in writing to the grant officer.

Sec. 1260.23 Termination and Enforcement.

Termination and Enforcement (July 1996)

Termination and enforcement conditions of this award are

specified in Secs. 1260.160 through 1260.162. If NASA determines

that the recipient has materially failed to comply with the terms

and conditions of the grant, NASA may suspend or terminate the grant

in whole or in part after consultation with the recipient. However,

NASA may immediately suspend or terminate the award without prior

notice when it believes such action is necessary to protect the

interest of the Government.

Sec. 1260.24 Change in principal investigator or scope.

Change in Principal Investigator or Scope (July 1996)

The recipient organization and the principal investigator are

responsible for the effective conduct of the project or activity

supported by this award.

(a) The recipient shall obtain the approval of the NASA grant

officer to change the principal investigator or to continue the

research work during a continuous period in excess of three months

without the participation of an approved principal investigator.

Significantly reduced availability of the services of the principal

investigator(s) named in the grant instrument could be grounds for

termination, unless alternatives arrangements are made and approved

in writing by the grant officer.

(b) Prior written approval is required from NASA if there is to

be a significant change in the objective or scope.

Sec. 1260.25 Allowable costs.

Allowable Costs (July 1996)

(a) The recipient institution is responsible for ensuring that

costs charged to this award are allowable, allocable, and reasonable

under the applicable cost principles defined in Sec. 1260.127.

Sections 1260.24, 1260,27, 1260.32, and requests for additional

funding require prior approvals.

(b) Payments to individuals for consultant services under a NASA

grant shall not exceed the daily equivalent of the maximum rate paid

for Level IV of the Executive Schedule, exclusive of expenses and

indirect cost.

to award, provided the costs are necessary for the effective and

economical conduct of the project and are otherwise allowable under

the terms of the grant. All preaward costs are incurred at the

recipient's risk. NASA is under no obligation to reimburse such

costs if an award is not subsequently made, or if an award is made

for a lesser amount than the recipient anticipated and is

insufficient to cover the pre-award costs.

(d) Comptroller General decisions govern allowability of costs

for international air transportation (see Sec. 1260.37).

Sec. 1260.26 Financial management.

Financial Management (July 1996)

(a) Payment. Advance payments by electronic funds transfer will

be made by the Financial Management Office of the NASA Center which

issued the grant in accordance with procedures provided to the

recipient. The recipient shall submit Federal Cash Transaction

Reports (SF 272) to the aforementioned office and, if NASA has

delegated administration, to the administrative grant officer,

within 15 working days following the end of each Federal fiscal

quarter, containing current estimates of the cash requirements for

each of the four months following the quarter being reported. The

final SF 272 is due within 90 days after the expiration date of the

grant.

(b) Management and records. Financial and program management

requirements of Secs. 1260.120 through 1260.128 apply to all

recipients. Financial records, supporting documents, statistical

records, and all other records pertinent to this award shall be

retained in accordance with Sec. 1260.153. Provisions of

Sec. 1260.26(c) shall apply to subcontractors performing substantive

work under this grant.

remains at the end of any funding period, except the final funding

period of the grant, shall be carried over to the next funding

period, and may be used to defray costs of any funding period of the

grant. The estimated amount of unexpended funds shall be identified

in the grant budget section of the recipient's renewal proposal.

(d) Program income will be subject to Sec. 1260.124.

(e) Provisions of Sec. 1260.26(c) shall apply to subcontractors

performing substantive work under this grant.

Sec. 1260.27 Equipment and other property.

Equipment and Other Property (July 1996)

(a) NASA permits acquisition of special purpose equipment (as

defined in OMB Circulars A-21 and A-122) specifically required and

only used for research, medical, scientific or other technical

activities.

(1) Acquisition of special purpose equipment, costing in excess

of $5,000 and not included in the approved proposal budget, requires

the prior approval of the administrative grant officer (unless the

item is merely a different model of an item in the approved proposal

budget).

(2) Title to special purpose equipment acquired by the recipient

with grant funds, valued under $5,000 in acquisition cost, shall

vest in the recipient and will be considered ``exempt'' in

accordance with Sec. 1260.133(b).

(3) NASA may elect to take title to items of special purpose

equipment valued at more than $5,000 (acquisition cost each) or when

fabricated into a single coherent system (aggregate acquisition

cost). The recipient will be advised of the Government's intention

to take title in writing if the item is approved for recipient

purchase. If the Government does not exercise its right to take

title to property acquired by the recipient with grant funds at the

time of approval, the property will be considered exempt according

to Sec. 1260.133(b). The recipient shall hold title without further

obligation to the Federal Government.

(b) General purpose equipment items require the prior approval

of the Grant Officer to be a direct charge, shall be titled to NASA,

managed in accordance with Sec. 1260.134(f), and reported in

accordance with Sec. 1260.27(e).

interests therein or for the acquisition and construction of

facilities only under a facilities grant, as defined in

Sec. 1260.12(g).

(d) The recipient shall maintain a property management system

which meets the requirements of Secs. 1260.130 through 1260.137. The

cognizant property administration officer or property administrator

shall be notified of any major change to an approved system.

(e) The recipient shall submit an Inventory Report, to be

received no later than October 31 of each year, which lists all

Federally owned property in its custody as of September 30. A Final

Inventory Report of Federally Owned Property, including equipment

where title was taken by the Government, will be submitted by the

recipient no later than 60 days after the expiration date of the

grant.

(1) All reports will include the information listed in paragraph

(f)(1) of Sec. 1260.134, Equipment.

(2) Negative responses in the Final Inventory Report, when there

is no reportable equipment, are required.

(3) The original of each report shall be submitted to the Center

Deputy Chief Financial Officer (Finance). Copies shall be furnished

to the Center industrial property officer and to ONR .

Sec. 1260.28 Patent rights.

Patent Rights (July 1996)

This award is subject to the provisions of 37 CFR 401.3(a) which

requires use of the standard clause set out at 37 CFR 401.14

``Patent Rights (Small Business Firms and Nonprofit Organizations)''

and the following:

(a) Where the term ``contract'' or ``contractor'' is used in the

``Patent Rights'' clause, the term shall be replaced by the term

``grant'' or ``recipient,'' respectively.

(b) In each instance where the term ``Federal Agency,''

``agency,'' or ``funding Federal agency'' is used in the ``Patent

Rights'' clause, the term shall be replaced by the term ``NASA.''

``Patent Rights'' clause is at 37 CFR Part 404, Licensing of

Government-owned Inventions.

(d) The following item is added to the end of paragraph (f) of

the ``Patent Rights'' clause:

(5) The recipient shall include a list of all Subject Inventions

required to be disclosed during the preceding year in the

performance report, technical report, or renewal proposal, and a

complete list (or a negative statement)

[[Page 38066]]

for the entire award period shall be included in the summary of

research.

(e) The term ``subcontract'' in paragraph (g) of the ``Patent

Rights'' clause shall include purchase orders.

(f) The NASA implementing regulation for paragraph (g)(2) of the

``Patent Rights'' clause is at 48 CFR 1827.373(b).

(g) The following requirement constitutes paragraph (1) of the

``Patent Rights'' clause:

(1) Communications. A copy of all submissions or requests

required by this clause, plus a copy of any reports, manuscripts,

publications or similar material bearing on patent matters, shall be

sent to the Center Patent Counsel and the administrative grant

officer in addition to any other submission requirements in the

grant provisions. If any reports contain information describing a

``subject invention'' for which the recipient has elected or may

elect to retain title, NASA will use reasonable efforts to delay

public release by NASA or publication by NASA in a NASA technical

series until an application filing date has been established,

provided that the recipient identify the information and the

``subject invention'' to which it relates at the time of submittal.

If required by the administrative grant officer, the recipient shall

provide the filing date, serial number and title, a copy of the

patent application, and a patent number and issue date for any

``subject invention'' in any country in which the recipient has

applied for patents.

h. NASA Inventions. NASA will use reasonable efforts to report

inventions made by NASA employees as a consequence of, or which bear

a direct relation to, the performance of specified NASA activities

under this agreement and, upon timely request, will use reasonable

efforts to grant recipient an exclusive, or partially exclusive,

revocable, royalty-bearing license, subject to the retention of a

royalty-free right of the Government to practice or have practiced

the invention by or on behalf of the Government.

i. In the event NASA contractors are tasked to perform work in

support of specified activities under a cooperative agreement and

inventions are made by contractor employees, and NASA has the right

to acquire or has acquired title to such inventions, NASA will use

reasonable efforts to report such inventions and, upon timely

request, will use reasonable efforts to grant recipient an

exclusive, or partially exclusive, revocable, royalty-bearing

license, subject to the retention of a royalty-free right of the

Government to practice or have practiced the invention by or on

behalf of the Government.

Sec. 1260.29 Rights in data.

Rights in Data (July 1996)

(a) Fully Funded Efforts.

(1) ``Data'' means recorded information, regardless of form, the

media on which it may be recorded, or the method of recording,

created under the grant. The term includes, but is not limited to,

data of a scientific or technical nature, and any copyrightable work

in which the recipient asserts copyright, or for which copyright

ownership was purchased, under the grant.

(2) The recipient grants to the Federal Government, a royalty-

free, nonexclusive and irrevocable license to use, reproduce,

distribute (including distribution by transmission) to the public,

perform publicly, prepare derivative works, and display publicly,

data in whole or in part and in any manner for Federal purposes and

to have or permit others to do so for Federal purposes only. Federal

purposes include competitive procurement but do not include the

right to have or permit others to use data for commercial purposes.

(3) In order that the Federal Government may exercise its

license rights in data, the Federal Government, upon request to the

recipient, shall have the right to review and/or obtain delivery of

data resulting from the performance of work under this grant, and

authorize others to receive data to use for Federal purposes.

(4) If information which recipient considers to embody trade

secrets or to comprise commercial or financial information which is

privileged or confidential is disclosed orally or visually to NASA,

such information must be reduced to tangible, recorded form (i.e.,

converted into data as defined herein), identified and marked with a

suitable notice or legend and furnished to NASA within 10 days after

such oral or visual disclosure, or NASA shall have no duty to limit

or restrict, and shall not incur any liability for, any disclosure

and use of such information.

(b) Cost Sharing and/or Matching Efforts. When the recipient

cost shares with the Government on the effort, the following is

added:

(5) In the event data first produced by recipient in carrying

out recipient's responsibilities under an agreement is furnished to

NASA, and recipient considers such data to embody trade secrets or

to comprise commercial or financial information which is privileged

or confidential, and such data is so identified with a suitable

notice or legend, the data will be maintained in confidence and

disclosed and used by the Government and its contractors (under

suitable protective conditions) only for experimental, evaluation,

research and development purposes, by or on behalf of the Government

for an agreed to period of time, and thereafter for Federal purposes

as defined in Sec. 1260.29(a)(2).

c. Add the following paragraph in Cooperative Agreements. (#) As

to data first produced by NASA in carrying out NASA's

responsibilities under a cooperative agreement and which data would

embody trade secrets or would comprise commercial or financial

information that is privileged or confidential if it has been

obtained from the recipient, such data will be marked with an

appropriate legend and maintained in confidence for an agreed to

period of up to ____ years (insert a period of up to 5 years.) after

development of the information, with the express understanding that

during the aforesaid period such data may be disclosed and used

(under suitable protective conditions) by or on behalf of the

Government for Government purposes only, and thereafter for any

purpose whatsoever without restriction on disclosure and use.

Recipient agrees not to disclose such data to any third party

without NASA's written approval until the aforementioned restricted

period expires.

Sec. 1260.30 National security.

National Security (July 1996)

Normally, NASA grants do not involve classified information.

However, if information is sought or developed by the recipient that

should be classified in the interests of national security, the NASA

grant officer who issued the grant shall be notified immediately.

Sec. 1260.31 Nondiscrimination.

Nondiscrimination (July 1996)

(a) To the extent provided by law and any applicable agency

regulations, this award and any program assisted thereby are subject

to the provisions of Title VI of the Civil Rights Act of 1964 (Pub.

L. 88-352), Title IX of the Education amendments of 1972 (Pub. L.

92-318), 20 U.S.C. 1681 et seq.), Section 504 of the Rehabilitation

Act of 1973 (29 U.S.C. 794), the Age Discrimination Act of 1975

(Pub. L. 94-135), the implementing regulations issued pursuant

thereto by NASA, and the assurance of compliance which the recipient

has filed with NASA.

(b) The recipient shall obtain from each organization that

applies or serves as a subrecipient, contractor or subcontractor

under this award (for other than the provision of commercially

available supplies, materials, equipment, or general support

services) an assurance of compliance as required by NASA

regulations.

of the Civil Rights Act of 1964 (Pub. L. 88-352; 42 U.S.C. 2000d-l),

Title IX of the Education Amendments of 1972 (20 U.S.C. 1680 et

seq.), section 504 of the Rehabilitation Act of 1973, as amended (29

U.S.C. 794), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et

seq.), and the NASA implementing regulations (14 CFR parts 1250,

1251, and 1252).

Sec. 1260.32 Subcontracts.

Subcontracts (July 1996)

(a) For all subcontracts over $25,000 awarded by the recipient,

the recipient shall provide the following to the NASA grant office

for approval.

(1) A copy of the proposed subcontract.

(2) Basis for subcontractor selection.

(3) Justification for lack of competition when competitive bids

or offers are not obtained.

(4) The subcontract budget and basis for subcontract cost or

price.

(b) The recipient (with the exception of foreign organizations)

shall utilize small business concerns, small disadvantaged business

concerns, Historically Black Colleges and Universities, minority

educational institutions, and women-owned small business concerns as

subcontractors to the maximum extent practicable.

purchases, shall contain the provisions found in appendix A to

subpart B of part 1260, as applicable.

[[Page 38067]]

Sec. 1260.33 Clean Air and Water.

Clean Air and Water (July 1996)

(Applicable only if the award exceeds $100,000, or a facility to

be used has been the subject of a conviction under the Clean Air Act

(42 U.S.C. 1857c-8(c)(1) or the Federal Water Pollution Control Act

(33 U.S.C. 1319(c)), and 9s listed by EPA, or if the award is not

otherwise exempt).

The recipient agrees to he following:

(a) Comply with applicable standards, orders or regulations

issued pursuant to the Clean Air Act, as amended (42 U.S.C. 7401, et

seq.) and of the Federal Water Pollution Control Act (33 U.S.C. 1251

et seq.).

(b) That no portion of the work under this award will be

performed in a facility listed on the Environmental Protection

Agency (EPA) List of Violating Facilities on the date that this

award was effective unless and until the EPA eliminates the name of

such facility or facilities from such listings.

clean water standards at the facility in which the award is being

preformed.

(b) Insert the substance of the provisions of this clause into

any nonexempt subward or contract under the award.

(e) Report violations to NASA or to EPA.

Sec. 1260.34 Procurement standards.

Procurement Standards (July 1996)

a. The recipient shall maintain a procurement system which, at a

minimum, meets the requirements set forth in Secs. 1260.140 through

1260.148.

b. Procurement programs funded with Federal funds shall give

preference to he purchase of recycled products pursuant to EOA

guidelines.

Sec. 1260.35 Foreign national employee investigative requirements.

Foreign National Employee Investigative Requirements (July 1966)

(a) The recipient agrees to provide the information requested by

NASA to allow the recipient's access to a NASA Center for

performance of this grant. All visit requests must be submitted in a

timely manner in accordance with instructions provided by the

Center(s) to be visited.

(b) The recipient acknowledges that NASA reserves the right to

perform security checks on foreign national visitors, and to deny or

restrict access to a NASA Center, facility, computer system, or

technical information in the interest of national security.

Sec. 1260.36 Travel and transportation.

Travel and Transportation (July 1996)

(a) The Fly America Act, 49 U.S.C. 40118, requires the recipient

to use U.S. flag air carriers for international air transportation

of personnel and property to he extent that service by those

carriers is available.

(b) Department of Transportation regulations, 49 CFR part 173,

govern recipient shipment of hazardous materials and other items.

Special Conditions

Sec. 1260.50 Special conditions.

(a) In addition to the provisions set forth in Secs. 1260.21

through 1260.37, NASA grants are subject to special conditions,

which either are not applicable to all awards or are temporary in

nature. Examples are found in Secs. 1260.51 through 1260.66, but

NASA may impose other conditions as discussed in Sec. 1260.114 or as

the requirements dictate. A deviation to this handbook is not

required for changes to special conditions.

(b) Special conditions will be printed in full text.

conditions necessary.

(d) In facilities grants, special conditions will be selected on

a case-by-case basis. As appropriate, the requirements of the

following sections will apply: Secs. 1260.132, Real property;

1260.123(c), Cost sharing or matching; and 1260.125(h), Revision of

budget and program plans.

(e) Research grants with foreign organizations will include

special conditions Secs. 1260.58 through 1260.62, modified as

necessary, when not covered under a Memorandum of Agreement (MOA).

In addition, other clauses (e.g., Secs. 1260.63 through 1260.66)

will be written with the aid of General Counsel, and added when

necessary.

Sec. 1260.51 Cooperative agreement special condition.

Cooperative Agreement Special Condition (July 1996)

(a) This award is a cooperative agreement as it is anticipated

there will be substantial NASA involvement during performance of the

effort. NASA and the recipient mutually agree to the following

statement of anticipated cooperative interactions which may occur

during the performance of this effort:

(Reference the approved proposal that contains a detailed

description of the work and insert a concise statement of the exact

nature of the cooperative interactions that deals with existing

facts and not contingencies.)

(b) The terms ``grant'' and ``recipient'' mean ``cooperative

agreement'' and ``recipient of cooperative agreement,''

respectively, wherever the terms appear in provisions and special

conditions included in this agreement.

effort under this cooperative agreement is subject to the

availability of appropriated funds and nothing in this cooperative

agreement commits the United States Congress to appropriate funds

therefor.

Sec. 1260.52 Multiple year grant.

Multiple Year Grant (July 1996)

This is a multiple year grant. Contingent on the availability of

funds, scientific progress of the project, an continued relevance to

NASA programs, NASA anticipates continuing support at approximately

the following levels:

Second year $________, Anticipated funding date ________.

Third year $________, Anticipated funding date ________.

(Periods may be added or omitted, as applicable).

Sec. 1260.53 Incremental funding.

Incremental Funding (July 1996)

Only $________ of the amount indicated on the face of this award

is available for payment and allotted to this award. NASA

contemplates making an additional allotment in the amount of

$________ by ________. These funds will be obligated as appropriated

funds become available without any action required by the recipient.

The recipient will be given written notification by the NASA grant

officer. NASA is not obligated to reimburse the recipient for the

expenditure of amounts in excess of the total funds allotted by

NASA.

Sec. 1260.54 Cost sharing.

Cost Sharing (July 1996)

(a) NASA and the recipient will share in providing the resources

necessary to perform the agreement. NASA funding and non-cash

contributions (personnel, equipment, facilities, etc.) and the

dollar value of the recipient's cash and/or non-cash contribution

will be on a ____ percent NASA; ____ percent recipient basis.

Criteria and procedures for the allowability and allocability of

cash and non-cash contributions shall be governed by Sec. 1260.123,

Cost Sharing or Matching. The applicable Federal cost principles are

cited in Sec. 1260.127.

(b) The recipient's share shall not be charged to the Government

under this agreement or under any other contract, grant, or

cooperative agreement.

Sec. 1260.55 Reports substitution.

Reports Substitution (July 1996)

Technical Reports may be substituted for the required

Performance Reports. The title page of such reports shall clearly

indicate that the substitution has been made and will show the

period covered by the originally required Performance Report.

Sec. 1260.56 Withholding.

Withhold (July 1996)

Pending receipt of a satisfactorily completed Summary of

Research and/or other reports required under NASA grant No.

________, the Financial Management Office will withhold all payments

under this grant (including advance payments). The grant officer

will notify the NASA Financial Management Office when payments can

resume.

Sec. 1260.57 Training grant reports.

Training Grant Reports (July 1996)

No later than 60 days after the ending date of the grant, the

recipient will provide the NASA Headquarters Office of Human

Resources and Education an Administrative Report that details the

fellow's research and academic progress. Pertinent information

relating to the student, including the degree granted and employment

plans, are to be included. Students are required to submit a

[[Page 38068]]

Student Evaluation Form to the administrative contact at the Center

monitoring the work 90 days prior to the ending date of the

fellowship.

Sec. 1260.58 Interest bearing accounts.

Interest Bearing Accounts (July 1996)

Advances of federal funds shall be maintained in interest-

bearing accounts. Interest earned on federal advances deposited in

such accounts shall be remitted to DHHS at least quarterly, as

instructed by the Financial Management Office of the NASA Center

which issued the grant. Interest amounts up to $250 per year may be

retained by the recipient.

Sec. 1260.59 Choice of law.

Choice of Law (July 1996)

The rights and obligations of the parties to the grant (or

cooperative agreement) shall be ascertainable by recourse to the

laws of the United States of America. However, it is understood that

the laws of the recipient's country will generally apply to

recipient activities within that country.

Sec. 1260.60 Invention reporting and rights.

Invention Reporting and Rights (July 1996)

(a) As used in this provision:

(1) The term ``invention'' means any invention, discovery or

improvement:

(2) The term ``made'' means the conception or first actual

demonstration that the invention is useful and operable.

(b) The recipient shall report promptly to the grant officer

each invention made in the performance of work under this grant. The

report of such invention shall:

(1) Identify the inventor(s) by full name; and

(2) Include such full and complete technical information

concerning the invention as is necessary to enable an understanding

of the nature and operation thereof.

States of American, as represented by the Administrator of the

National Aeronautics and Space Administration, the full rights,

title, and interest in and to each such invention throughout the

world except ____________________.

Sec. 1260.61 Public information.

Public Information (July 1996)

Information regarding this grant (including a copy of this award

document) may be released by the recipient without restriction.

However, technical information relating to work performed under this

grant where there was a NASA contribution should be released by the

recipient only after consultation with the NASA Technical Officer.

Sec. 1260.62 Allocation of risk/liability.

Allocation of Risk/Liability (July 1996)

a. With respect to activities undertaken under this agreement,

the recipient agrees not to make any claim against NASA or the U.S.

Government with respect to the injury or death of its employees or

its contractors and subcontractor employees, or to the loss of its

property or that of its contractors and subcontractors, whether such

injury, death, damage or loss arises through negligence or

otherwise, except in the case of willful misconduct.

b. In addition, the recipient agrees to indemnify and hold the

U.S. Government and its contractors and subcontractors harmless from

any third party claim, judgment, or cost arising from the injury to

or death of any person, or for damage to or loss of any property,

arising as a result of its possession or use of any U.S. Government

property.

Sec. 1260.63 Payment--to foreign organizations.

Payment--To Foreign Organizations

(For grants or cooperative agreements with foreign

organizations, this clause will be developed on a case-by-case

basis.)

Sec. 1260.64 Customs clearance and visas.

Customs Clearance and Visas

(For grants or cooperative agreements with foreign

organizations, this clause will be developed on a case-by-case

basis.)

Sec. 1260.65 Taxes.

Taxes

(For grants or cooperative agreements with foreign

organizations, this clause will be developed on a case-by-case

basis.)

Sec. 1260.66 Exchange of technical data and goods.

Exchange of Technical Data and Goods

(For grants or cooperative agreements with foreign

organizations, this clause will be developed on a case-by-case

basis.)

Post-Award Requirements

Sec. 1260.70 Delegation of administration.

(a) Pursuant to the Government-wide ``cross-servicing'' policy,

NASA grants and cooperative agreements shall be delegated for full

administration (including property and closeout) to the Office of Naval

Research (ONR). Exceptions to this policy must be approved by the

Procurement Officer, documented, and made part of the file.

(b) Delegations will be made by using NASA Form NF 1671. The grant

officer will strike out any parts of the form that do not apply and

write in specific instructions regarding actions requiring ONR

involvement. The grant officer will inform the recipient, in writing,

that a delegation has been made.

the grant officer within five days of receipt.

Sec. 1260.71 Supplements and renewals.

(a) A NASA grant officer can unilaterally make minor or

administrative changes to a grant; e.g., Reports Substitution

(Sec. 1260.55), Withholding (Sec. 1260.56), and Novations

(Sec. 1260.74). Renewal of grant (Sec. 1260.22) is a unilateral

decision by NASA based upon availability of funds, continued research

relevance, and progress made by the recipient.

(b) To eliminate the paperwork burdens associated with closeout and

negotiations for a new grant, ongoing efforts to continue the same

effort at the same institution will be accomplished by modifying the

current instrument, unless there is a significant change in the nature

of the work or closure would be in the best interest of the Government.

(1) Grants should be renewed prior to their expiration date. When

possible, the period of performance should be continuous with the prior

grant. If otherwise acceptable, NASA may fund an extension through a

multiple year grant (Sec. 1260.13(a)) or by extending the existing

grant. Such extensions (other than no-cost extensions) must be

supported by a new proposal from the recipient.

(2) To insure continuation, the technical office should forward to

the grant office a complete technical evaluation, support

documentation, and/or a funded Procurement Request at least 45 days

before the expiration of the funded period.

Although the grant officer has little control over the timely

receipt of purchase requests, he/she is responsible for informing the

technical officer of current lead-time requirements and for timely

processing continuation agreements.

(3) The technical office will notify the recipient if the grant is

to be funded or if additional information is required. Alternatively,

if a grant is not to be renewed, the program office should give the

grant officer and the recipient 30-day notice.

to the grant officer. Examples might include changes in principal

investigator or additional funding. After concurrence by the program

manager, a grant supplement will be unilaterally issued at the

discretion of the grant officer.

(d) A single no-cost extension for up to 12 months can be

unilaterally issued by the recipient as detailed in paragraph (b) of

the provision Sec. 1260.22, Extensions.

(e) When two or more actions are completed on a single supplement,

the supplement will reflect the effective date of the earliest action.

[[Page 38069]]

Sec. 1260.72 Adherence to original budget estimates.

(a) Although NASA assumes no responsibility for budget overruns,

the recipient may spend grant funds without strict adherence to

individual allocations within the proposed budgets, except as provided

in Secs. 1260.27 and 1260.32.

(b) The revision of budgets and program plans are covered in

Sec. 1260.125.

Sec. 1260.73 Transfers, novations, and change of name agreements.

(a) Transfer of grants. Novation as provided in Sec. 1260.73(b), is

the only means by which a grant may be transferred from one institution

to another. When the principal investigator changes organizational

affiliation and desires support for the research at a new location and

novation is not used, a new proposal must be submitted to NASA via the

appropriate officials of the new institution. Although such a proposal

will be reviewed in the normal manner, every effort will be made to

expedite a decision. Regardless of the action taken on the new

proposal, final reports on the original grant, describing the

scientific progress and expenditure to date, will be required.

(b) Novation and change of name. All novation agreements and change

of name agreements of the recipient, prior to execution, shall be

reviewed by legal counsel for legal sufficiency. When a change in

principal investigator from one institution to another occurs, novation

of the grant is preferable to termination.

Sec. 1260.74 Property use, disposition, and vesting of title.

(a) Administrative grant officers shall not approve the expenditure

of grant funds for the acquisition of general purpose equipment as

defined by OMB Circulars A-21 and A-122 unless the recipient's

justification for the equipment demonstrates that the equipment will be

used exclusively for research.

(b) Property administration and plant clearance for all grants and

cooperative agreements will be delegated to the appropriate DoD

property administration office.

related grant documentation to the Center industrial property officer

(prior to award or modification) when the program office elects to

retain title to an existing item of Government property, to furnish the

property to the recipient in lieu of donation or to take title to

property acquired by the recipient. When NASA acquires title to items

of recipient acquired equipment or when NASA transfers an item of

Government property to a recipient as Federally owned property, the

administrative grant officer shall notify both the cognizant NASA

Center financial management officer and the equipment management

officer to ensure proper entries in financial and property accounting

records.

(d) NASA policy encourages titling as ``exempt'' all property

acquired by a nonprofit organization whose primary purpose is the

conduct of scientific research, without further obligation to the

Federal Government. Unless NASA takes title, equipment purchased with

grant funds vests in the recipient subject to Sec. 1260.134.

(1) If NASA elects to take title to recipient acquired property,

said decision will be subject to Sec. 1260.132(b)(3).

(2) Title to individual items or coherent systems (as defined in

Sec. 1260.74(f)) of recipient acquired equipment purchased at a cost of

more than $5,000 may revert back to NASA at NASA's discretion, subject

to the following conditions.

(i) NASA shall notify the recipient in writing as part of the

approval for retaining the item. If the item was requested as part of

the original budget, the award must specify NASA's intention to take

title.

(ii) Government titled property will be subject to the provisions

for other Federally owned property as stated in Sec. 1260.133.

(3) Title to equipment costing $5,000 or less is not subject to

transfer to the agency, except under the conditions of Sec. 1260.74(f).

(e) Title to Federally-owned property remains with the Government.

(1) In accordance with Pub. L. 94-519, NASA will not acquire

property from other agencies for use on NASA grants.

(2) When Federally-owned property is reported excess by a

recipient, the administrative grant officer will report the equipment

to the Center property disposal officer.

(3) NASA policy encourages the donation of existing, excess NASA

property to nonprofit organizations whose primary purpose is the

conduct of scientific research.

(f) When two or more components are fabricated into a single

coherent system in such a way that the components lose their separate

identities, and their separation would render the system useless for

its original purpose, the components will be considered as integral

parts of a single system. If such a system includes recipient-owned

components, the property will be considered to be exempt. The

requirement for agreement regarding NASA's retention of its option to

take title shall further apply where it is expected that one or more

recipient-acquired components costing $5,000 or less will be fabricated

into a single coherent system costing in excess of $5,000. However, an

item that is used ancillary to a system, without loss of its separate

identity and usefulness, will be considered as a separate item and not

as an integral component of the system.

Sec. 1260.75 Reports.

(a) The grant officer is responsible for submitting the Individual

Procurement Action Report (NASA Form 507) for all grant actions.

(b) The Committee on Academic Science and Engineering (CASE) Report

(NASA Form 1356), for research grants awarded to educational

institutions, is submitted with the basic award procurement request. In

the case of certain non-funded actions for educational institutions,

the NF 1356 is initiated by the grant officer.

submitted by the recipient within 15 working days following the end of

each Federal fiscal quarter, as a condition of receiving advance

payments. Instructions and answers to payment questions will be

provided by the Financial Management Office of the Center that issued

the grant. (see Sec. 1260.152.)

(d) The annual Inventory Report of Federally Owned Property in

Custody of the Recipient will be submitted by the recipient by October

31, as required by Sec. 1260.27(e). The listing shall include

information specified in Sec. 1260.134(f) together with beginning and

ending dollar value totals for the reporting period.

(e) A Performance Report shall be submitted in accordance with

Secs. 1260.21 and 1260.151(d). Recipients shall not be required to

submit more than the original and two copies of performance reports

(Sec. 1260.151(e)). At the request of the technical officer, this

requirement may be modified by use of special condition Sec. 1260.55

entitled ``Reports Substitution''.

(f) Final reports are as follows.

(1) A Summary of Research for research grants, an Education

Activity Report for education grants, or an Administrative Report for

training grants, shall be submitted as required by Sec. 1260.21 or

Sec. 1260.57. Citation of publications resulting from research, or

abstracts thereof, may serve as all or part of the summary. A separate

report is required if inventions and patents

[[Page 38070]]

resulted from the work. In addition, students are required to submit a

Student Evaluation Form to the administrative contact at the Center

monitoring the work 90 days prior to the ending date of a fellowship.

(2) A Final Inventory Report of Federally Owned Property, including

equipment where title was taken by the Government, shall be submitted

by the recipient no later than 60 days after the end of the grant, as

required by Sec. 1260.27.

(3) A properly certified Final Federal Cash Transactions Report, SF

272, is required from the recipient for each grant, as addressed in

Sec. 1260.26(a).

(g) One copy of each Disclosure of Lobbying Activities (SF LLL),

under 14 CFR 1271.110, shall be provided by the grant officer to the

Procurement Officer for transmittal to the Director, Contract

Management Division (Code HK). Suspected violations of the statutory

prohibitions implemented by 14 CFR part 1271 shall be reported to Code

HK.

(h) The Director, Program Operations Division (Code HS), shall

provide to the General Services Administration information concerning

all NASA debarments, suspensions, determinations of ineligibility, and

voluntary exclusions of persons in accordance with 14 CFR 1265.505.

(i) Remedies for Noncompliance are delineated in Sec. 1260.162.

(1) Failure of the recipient to provide a required grant report can

result in the Agency and the public being denied information about

grant activities, NASA officials having less information for making

decisions, grant closeout being delayed, and confidence being

undermined as to whether the recipient will meet the requirements under

other grants. Because NASA grants provide for advance payments, a

recipient could be fully paid before final reports are due. At this

point, it is too late to withhold payment on the existing grant.

(2) Consistent with Secs. 1260.122(h) and 1260.162(a), NASA does

not withhold payment until a recipient has failed to comply with report

requirements for more than 90 days. To remedy failure to furnish

reports, special condition Sec. 1260.56, Withholding, should be used

when awarding a new grant or modifying an existing grant with non-

responsive organizations.

(i) Special condition Sec. 1260.56 instructs the Financial

Management Office to withhold payment pending receipt of the

satisfactorily completed reports required in Sec. 1260.75.

(ii) The grant officer may waive the withholding requirement when

the recipient has taken corrective action that makes withholding

unnecessary. To release for payment the amount withheld, grant officers

shall send a memorandum to their Financial Management Office.

Sec. 1260.76 Suspension or termination.

Suspension of termination of a grant prior to the planned

expiration date must be reserved for exceptional situations that cannot

be handled any other way (see Secs. 1260.23 and 1260.160). Before

suspending or terminating any grant with a university, the NASA grant

officer and technical officer shall take into account the consequences

to graduate students working under the grant.

Sec. 1260.77 Closeout procedures.

The closeout of a grant is the process by which NASA determines

that all applicable administrative actions and all required work under

the instrument have been completed by both the recipient and NASA and

no further action is necessary (see Sec. 1260.171).

(a) Initiation. The NASA grant officer shall determine from the

technical officer that work under a particular grant will not be

continued or is completed. The NASA grant officer will promptly notify

ONR to begin closeout within 90 days of this determination. ONR will

inform the recipient of pending closeout and the final documentation

required, to the extent practicable, prior to the grant's expiration

date.

(1) To expedite closeout, NASA grant officers shall respond to ONR

inquiries within 30 days. The use of E-mail communication between ONR

and NASA is encouraged.

(2) Recipients shall not be requested to complete forms or supply

information other than discussed in Sec. 1260.75(c) through (f), except

in unusual situations.

(b) Reports submission. ONR will ensure that all reports required

from the recipient (see Sec. 1260.75) have been received by the

appropriate NASA offices.

NASA reports, written certification that the reports have been

satisfactorily completed. The property certification should indicate

that disposal of any remaining Government property has been made as

directed and that NASA has been compensated for any residual inventory

(see Sec. 1260.135). In reviewing the certifications, see

Secs. 1260.171 and 1260.172.

(d) Administrativly complete. A grant is administratively complete

when

(1) All reports have been received;

(2) All certifications have been received;

(3) Payments have been made for allowable reimbursable costs and

refunds have been received for any balance of unobligated cash advanced

that is not authorized to be retained for use on other grants; and

(4) A DD Form 1594 has been provided by ONR to the NASA grant

officer.

(e) Retention of documents. Records will be retained in accordance

with Sec. 1260.153.

Appendix to Subpart A to Part 1260--Listing of Exhibits

Exhibit A--Delegation of Administration

Exhibit B--Formats

Example 1--Research Grant

Example 2--Cooperative Agreement

Example 3--Training Grant

Example 4--Education Grant

Example 5--Grant or Cooperative Agreement with Foreign Organizations

Exhibit C--Budget Summary

Note: Exhibits are available at NASA Headquarters, Code HK,

Washington, DC 20546.

Subpart B--Uniform Administrative Requirements for Grants and

Cooperative Agreements with Institutions of Higher Education,

Hospitals, and Other Non-Profit Organizations

General

Sec. 1260.101 Purpose.

This subpart implements OMB Circular No. A-110 and establishes

uniform administrative requirements for NASA grants and agreements

awarded to institutions of higher education, hospitals, and other non-

profit organizations. NASA shall not impose additional or inconsistent

requirements, except as provided in Secs. 1260.104 and 1260.114 or

unless specifically required by Federal statute or executive order.

Non-profit organizations that implement Federal programs for the States

are also subject to State requirements.

Sec. 1260.102 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, subcontractors,

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:

[[Page 38071]]

(1) Earnings during a given period from services performed by the

recipient, and 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.

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 a grant or cooperative agreement that provides

support or stimulation to accomplish a public purpose. Awards include

research grants, training grants, facilities grants, educational

grants, and cooperative agreements in the form of money or property in

lieu of money, by NASA 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 of 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 NASA determines that all

applicable administrative actions and all required work of the award

have been completed by the recipient and NASA.

(h) Contract means a procurement contract under an award, and a

procurement subcontract under a recipient's contract.

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

program costs not borne by NASA.

(j) 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 NASA sponsorship ends.

(k) Disallowed costs means those charges to an award that NASA

determines to be unallowable, in accordance with the applicable Federal

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

(l) 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.

(m) Excess property means property under the control of any Federal

awarding agency that, as determined by the head thereof, is no longer

required for its needs or the discharge of its responsibilities.

(n) Exempt property means tangible personal property acquired in

whole or in part with Federal funds, where a Federal awarding agency

has statutory authority to vest title in the recipient without further

obligation to the Federal Government. An example of exempt property

authority is contained in the Federal Grant and Cooperative Agreement

Act (31 U.S.C. 6306), for property acquired under an award to conduct

basic or applied research by a non-profit institution of higher

education or non-profit organization whose principal purpose is

conducting scientific research.

(o) NASA means the National Aeronautics and Space Administration

(NASA), including its authorized representatives.

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

funds obligated by the Federal Government for use by the recipient.

This amount may include any authorized carryover of unobligated funds

from prior funding periods when permitted by agency regulations or

agency implementing instructions.

(q) 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.

(r) Funding period means the period of time when NASA funding is

available for obligation by the recipient.

(s) 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.

(t) Obligations mean 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.

(u) 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 subcontractors. 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 good and other property received, for services performed by

employees, contractors, subcontractors and other payees and other

amounts becoming owed under programs for which no current services or

performance are required.

(v) 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.

(w) Prior approval means written approval by an authorized official

evidencing prior consent.

(x) 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. 1270.24(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 NASA funds is not program income. Except as

otherwise provided in these 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.

(y) 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.

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

document

[[Page 38072]]

during which NASA sponsorship begins and ends.

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

equipment, intellectual property and debt instruments.

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

structures and appurtenances thereto, but excludes movable machinery

and equipment.

(cc) Recipient means an organization receiving an award directly

from NASA 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 may

include commercial organizations, foreign or international

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

recipients, subcontractors, or contractors or subcontractors of

recipients. 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.

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

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

universities, colleges, and other nonprofit 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 included 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.

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

exceeding the small purchase threshold.

(ff) 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.

(gg) 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 may include foreign or international organizations

(such as agencies of the United Nations).

(hh) Supplies means all personal property excluding equipment,

intellectual 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.''

(ii) Suspension means an action by NASA that temporarily withdraws

NASA sponsorship under an award, pending corrective action by the

recipient or pending a decision to terminate the award by NASA.

Suspension of an award is a separate action from suspension under

Federal agency regulations implementing Executive Orders 12549 and

12689, ``Debarment and Suspension.''

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

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

completion.

(kk) 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.

(ll) 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.

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

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

by deducting the cumulative obligations from the cumulative funds

authorized.

(nn) 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.

(oo) 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. 1260.103 Effect on other issuances.

For awards subject to this subpart, all administrative requirements

of codified program regulations, program manuals, handbooks and other

nonregulatory materials which are inconsistent with the requirements of

this subpart shall be superseded, except to the extent they are

required by statute, or authorized in accordance with the deviations

provision in Sec. 1260.104.

Sec. 1260.104 Deviations.

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

classes of grants or recipients subject to the requirements of this

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

interest of maximum uniformity, exceptions from the requirements of

this subpart shall be permitted only in unusual circumstances. NASA may

apply more restrictive requirements to a class of recipients when

approved by OMB. NASA 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 NASA.

See Sec. 1260.6(c).

Sec. 1260.105 Subawards.

Unless sections of this subpart specifically exclude subrecipients

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

subrecipients performing work under awards if such subrecipients are

institutions of higher education, hospitals or other non-profit

organizations. State and local government subrecipients are subject to

the provisions of 14 CFR part 1273, ``Uniform Administrative

Requirements for Grants and Cooperative Agreements to State and Local

Governments.''

Pre--Award Requirements

Sec. 1260.110 Purpose.

Sections 1260.111 through 1260.117 prescribe forms and instructions

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

Sec. 1260.111 Pre-award policies.

(a) Use of grants and cooperative agreements, and contracts. In

each instance, NASA shall decide on the appropriate award instrument

(i.e., grant, cooperative agreement, or

[[Page 38073]]

contract). The Federal Grant and Cooperative Agreement Act (31 U.S.C.

6301-08) governs the use of grants, cooperative agreements and

contracts. A grant or cooperative agreement shall be used only when the

principal purpose of a transaction is to accomplish a public purpose of

support or stimulation authorized by Federal statute. The statutory

criterion for choosing between grants and cooperative agreements is

that for the latter, ``substantial involvement is expected between the

executive agency and the State, local government, or other recipient

when carrying out the activity contemplated in the agreement.''

Contracts shall be used when the principal purpose is acquisition of

property or services for the direct benefit or use of the Federal

Government.

(b) Public Notice and Priority Setting. NASA shall notify the

public of its intended funding priorities for discretionary grant

programs, unless funding priorities are established by Federal statute.

Sec. 1260.112 Forms for applying for Federal assistance.

(a) NASA shall comply with the applicable report clearance

requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the

Public,'' with regard to all forms used by the NASA in place of or as a

supplement to the Standard Form 424 (SF-424) series.

(b) Applicants shall use those forms and instructions prescribed by

NASA in Sec. 1260.

Sec. 1260.113 Debarment and suspension.

NASA and recipients shall comply with the nonprocurement debarment

and suspension rule, 14 CFR part 1265, ``Governmentwide Debarment and

Suspension (Nonprocurement) and Governmentwide Requirements for Drug-

Free Workplace (Grants),'' implementing Executive Orders 12549 and

12689, ``Debarment and Suspension.'' This rule restricts contracts with

certain parties that are debarred, suspended or otherwise excluded from

or ineligible for participation in Federal assistance programs or

activities.

Sec. 1260.114 Special award conditions.

If an applicant or recipient has a history of poor performance, is

not financially stable, has a management system that does not meet the

standards prescribed in this subpart, has not conformed to the terms

and conditions of a previous award, or is not otherwise responsible,

NASA may impose additional requirements as needed. Such applicant or

recipient will be 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. 1260.115 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. NASA shall follow the provisions of Executive Order

12770, ``Metric Usage in Federal Government Programs.''

Sec. 1260.116 Resource Conservation and Recovery Act (RCRA).

Under the 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 of the

RCRA (42 U.S.C. 6962). 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. 1260.117 Certifications and representations.

Unless prohibited by statute or codified regulation, NASA will

allow recipients to submit certain certifications and representations

required by statute, executive order, or regulation on an annual basis,

if the recipients have ongoing and continuing relationships with the

agency. Annual certifications and representations shall be signed by

responsible officials with the authority to ensure recipient's

compliance with the pertinent requirements.

Post Award Requirements

Financial and Program Management

Sec. 1260.120 Purpose of financial and program management.

Sections 1260.121 through 1260.128 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. 1260.121 Standards for financial management systems.

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

develop unit cost information whenever practical. For awards that

support research, it should be noted that it is generally not

appropriate to develop unit cost information.

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

following.

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

results of each federally-sponsored project or program in accordance

with the reporting requirements set forth in Sec. 1260.152. If NASA

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.

[[Page 38074]]

(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.

repayment of money borrowed by the recipient, NASA, 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) NASA 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 Unites States.''

Sec. 1260.122 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)(1) Recipients are to be paid in advance, provided they maintain

or demonstrate the willingness to maintain:

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

transfer of funds and disbursement by the recipient; and

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

control and accountability as established in Sec. 1260.121.

(2) 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.

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

(1) Advance payments will be made by electronic funds transfer.

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

(d) [Reserved. Not used by NASA.]

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

paragraph (b) of this section cannot be met. NASA 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. When the reimbursement method is used, NASA

shall make payment within 30 days after receipt of the billing, unless

the billing is improper.

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

and NASA has determined that reimbursement is not feasible because the

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

working capital advance basis. Under this procedure, NASA 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, NASA 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 subcontractor to meet the subcontractor'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, NASA will not withhold

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

project period unless the conditions in paragraph (h) (1) or (2) of

this section apply.

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

the terms and conditions of the award, or NASA reporting requirements.

(2) The recipient is delinquent in a debt to the United States as

defined in OMB Circular A-129, ``Managing Federal Credit Programs.''

Under such conditions, NASA 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, NASA 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 the conditions in paragraph (k) (1), (2) or

(3) of this section apply.

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

year.

(2) The best reasonable 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.

(l) Interest earned on Federal advances deposited in interest-

bearing accounts in excess of $250 per year shall be remitted annually

to Department of Health and Human Services (DHHS), Payment Management

System,

[[Page 38075]]

Rockville, MD 20852. Interest amounts up to $250 per year may be

retained by the recipient for administrative expense. In accordance

with 31 CFR part 206, interest should be remitted electronically

through the Automated Clearing House (ACT) to DHHS. Recipients without

this capability may make the remittance by check. In either case, the

remittance should be payable to DHHS and should indicate the

recipient's Entity Identification Number (EIN) and reason, i.e.,

``Interest earned.''

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

forms shall be authorized for the recipients in requesting advances and

reimbursements. Federal agencies shall not require more than an

original and two copies of these forms.

(1) SF-270, Request for Advance or Reimbursement. [Reserved. Not

used by NASA.]

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

Construction Programs. The SF-271 may be used for requesting

reimbursement for NASA construction programs.

Sec. 1260.123 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 NASA.

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

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

sharing or matching only with the prior approval of NASA.

shall be established in accordance with the applicable cost principles.

If NASA 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 paragraph (c) (1) or (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, NASA 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 the

conditions in paragraph (g) (1) or (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 NASA 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. 1260.124 Program income.

(a) The standards set forth in this section shall be used to

account for program income related to projects financed in whole or in

part with Federal funds.

(b) Except as provided in paragraph (h) of this section, program

income earned during the project period shall be retained by the

recipient and, in accordance with the terms and conditions of the

award, shall be used in one or more of the ways listed in the

following.

(1) Added to funds committed to the project by NASA and recipient

and used to further eligible project or program objectives.

(2) Used to finance the non-Federal share of the project or

program.

(3) Deducted from the total project or program allowable cost in

determining the net allowable costs on which the Federal share of costs

is based.

[[Page 38076]]

described in paragraphs (b)(1) or (b)(2) of this section, program

income in excess of any limits stipulated shall be used in accordance

with paragraph (b)(3) of this section.

(d) In the event that the program regulations or the terms and

conditions of the award do not specify how program income is to be

used, paragraph (b)(3) of this section shall apply automatically to all

projects or programs except research. For awards that support research,

paragraph (b)(1) shall apply automatically unless the awarding agency

indicates in the terms and conditions another alternative on the award

or the recipient is subject to special award conditions, as indicated

in Sec. 1260.114.

(e) Unless program regulations or the terms and conditions of the

award provide otherwise, recipients shall have no obligation to the

Federal Government regarding program income earned after the end of the

project period.

(f) Unless program regulations or the terms and conditions of the

award provide otherwise, costs incident to the generation of program

income may be deducted from gross income to determine program income,

provided these costs have not been charged to the award.

(g) Proceeds from the sale of property shall be handled in

accordance with the requirements of the Property Standards (See

Secs. 1260.130 through 1260.137).

(h) Unless program regulations or the terms and condition of the

award provide otherwise, recipients shall have no obligation to the

Federal Government with respect to program income earned from license

fees and royalties for copyrighted material, patents, patent

applications, trademarks, and inventions produced under an award.

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

inventions made under an experimental, developmental, or research

award.

Sec. 1260.125 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 requirements in these regulations. 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.

approvals from NASA for one or more of the following program or budget

related reasons.

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

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

approval).

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

document.

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

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

director or principal investigator.

(4) The need for additional Federal funding.

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

increases in direct costs, or vice versa, if approval is required by

NASA.

(6) The inclusion, unless waived by NASA, 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;'' 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, NASA is authorized, at its option, to 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 approval of NASA. All pre-award

costs are incurred at the recipient's risk (i.e., NASA 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 anticipate and

inadequate to cover such costs).

(2) Initiated a non-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 NASA 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.

(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 NASA provides

otherwise in the award or in the agency's regulations, the prior

approval requirements described in paragraph (e) of this section are

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

approvals) unless one of the conditions included in paragraph (e)(2) of

this section applies.

(f) Program regulations may restrict the transfer of funds among

direct cost categories or programs, functions and activities for awards

in which NASA's 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 NASA. However, no

program regulation shall permit a transfer that would cause any Federal

appropriation or part thereof to be used for purposes other than those

consistent with the original intent of the appropriation.

(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 NASA for budget revisions whenever the

conditions in paragraphs (h)(1), (2) or (3) or 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. 1260.127.

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

imposed unless a deviation has been approved by OMB.

[[Page 38077]]

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

construction and nonconstruction work, NASA may require the recipient

to request prior approval from NASA before making any fund or budget

transfers between the two types of work supported.

(k) For both construction and nonconstruction awards, NASA shall

require recipients to notify NASA 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 Federal 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 approval for budget revisions, recipients shall

use the budget forms that were used in the application unless NASA

indicates a letter of request suffices.

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

for budget revisions, NASA 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,

NASA shall inform the recipient in writing of the date when the

recipient may expect the decision.

Sec. 1260.126 Non-Federal audits.

(a) Recipients 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.''

(b) State and local governments shall be subject to the audit

requirements contained in the Single Audit Act (31 U.S.C. 7501-7) and

NASA regulations implementing OMB Circular A-128, ``Audits of State and

Local Governments.''

A-133 shall be subject to the audit requirements of NASA.

(d) Commercial organizations shall be subject to the audit

requirements of NASA or the prime recipient as incorporated into the

award document.

Sec. 1260.127 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. 1260.128 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 NASA.

Property Standards

Sec. 1260.130 Purpose of property standards.

Sections 1260.131 through 1260.137 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 shall observe these standards under awards

and NASA will not impose additional requirements, unless specifically

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

management standards and procedures provided it observes the provisions

of Secs. 1260.131 through 1260.137.

Sec. 1260.131 Insurance coverage.

Recipients shall, at a minimum, provide the equivalent insurance

coverage for real property and equipment acquired with Federal funds as

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

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

award.

Sec. 1260.132 Real property.

Unless otherwise provided by statue, the requirements concerning

the use and disposition of real property acquired in whole or in part

under awards are as follows:

(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 NASA.

(b) The recipient shall obtain written approval by NASA 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

NASA.

paragraph (a) and (b), the recipient shall request disposition

instructions from NASA or its successor Federal awarding agency. NASA

shall observe one or more of the following disposition instructions.

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

obligation to the Federal Government after it compensates the Federal

Government for the 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 NASA and pay the Federal Government for that

percentage of the current fair market value of the property

attributable to the Federal participation in the project (after

deducting actual and reasonable selling and fix-up expenses, if any,

from the sales proceeds). When the recipient is authorized or required

to sell the property, proper sales procedures shall be established that

provide for competition to the extent practicable and result in the

highest possible return.

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

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

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

attributable percentage of the current fair market value of the

property.

Sec. 1260.133 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 NASA. Upon completion of the award or when the property is

no longer needed, the recipient shall report the property to

[[Page 38078]]

NASA for further Federal agency utilization.

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

declared excess and reported to the General Services Admiration, unless

NASA 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

NASA.

(b) Exempt property. Title to nonexpendable personal property

acquired with grant funds shall be vested in the recipient upon

acquisition, unless it is determined that to do so is not in

furtherance of the objectives of NASA. When title is vested in the

recipient, the recipient shall have no other obligation or

accountability to the Federal Government for its use or disposition,

except as provided in Sec. 1260.27.

Sec. 1260.134 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.

for which it was acquired as long as needed, whether nor not the

project or program continues to be supported by Federal funds and shall

not encumber the property without approval of NASA. 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 NASA, then

(2) Activities sponsored by other Federal agencies.

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

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

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

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

equipment was originally acquired. First preference for such other use

shall be given to other projects or programs sponsored by NASA; second

preference shall be given to projects or programs sponsored by other

Federal 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 NASA. User charges shall be treated as

program income.

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

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

proceeds to offset the costs of the replacement equipment subject to

the approval of NASA.

(f) The recipients'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 NASA 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 NASA.

(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 Federal awarding

agency or its successor. The amount of compensation shall be computed

by applying the percentage of Federal participation in the cost of the

original project or program to the current fair market value of the

equipment. If the recipient has no need for the equipment, the

recipient shall request disposition instructions from NASA. NASA shall

determine whether the equipment can be used to meet NASA's

requirements. If no requirement exists within NASA, the availability of

the equipment shall be reported to the General Services Administration

by NASA to determine whether a requirement for the equipment exists in

other Federal agencies. NASA 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 NASA 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

[[Page 38079]]

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 NASA for such costs

incurred in its disposition.

(4) NASA may reserve the right to transfer the title to the Federal

Government or to a third party named by NASA 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) NASA 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 NASA fails to issue disposition instructions within the 120 calendar

day period, the recipient shall apply the standards of this section, as

appropriate.

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

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

Sec. 1260.135 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. 1260.136 Intangible property.

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

to copyright and was created, or for which copyright ownership was

purchased, under an award. NASA is granted 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.''

(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 intellectual property and debt instruments acquired

under an award or subcontract vests upon acquisition in the recipient.

The recipient shall use that property for the originally-authorized

purpose, and the recipient shall not encumber the property without

approval of NASA. When no longer needed for the originally authorized

purpose, disposition of the intangible property shall occur in

accordance with the provisions of Sec. 1260.134(g).

(e) Due to the substantial involvement on the part of NASA under a

cooperative agreement, intellectual property may be produced by Federal

employees and NASA contractors tasked to perform NASA assigned

activities. Title to intellectual property created under the

cooperative agreement by NASA or its contractors will initially vest

with the creating party. Certain rights may be exchanged with the

recipient.

Sec. 1260.137 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. NASA 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. 1260.140 Purpose of procurement standards.

Sections 1260.141 through 1260.148 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 NASA upon recipients, unless

specifically required by Federal statute or executive order or approved

in accordance with the deviation procedures of Sec. 1260.6.

Sec. 1260.141 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 NASA, 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. 1260.142 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.

[[Page 38080]]

Sec. 1260.143 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. 1260.144 Procurement procedures.

(a) All recipients shall establish written procurement procedures.

These procedures shall provide for, at a minimum, that the conditions

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

(1) Recipients avoid purchasing unnecessary items.

(2) Where appropriate, an analysis is made of lease and purchase

alternatives to determine which would be the most economical and

practical procurement for the Federal Government.

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

following.

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

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

procurements, such a description shall not contain features which

unduly restrict competition.

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

other factors to be used in evaluating bids or proposals.

(iii) A description, whenever practicable, of technical

requirements in terms of functions to be performed or performance

required, including the range of acceptable characteristics or minimum

acceptable standards.

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

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

solicitation.

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

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

measurement.

(vi) Preference, to the extent practicable and economically

feasible, for products and services that conserve natural resources and

protect the environment and are energy efficient.

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

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

whenever possible. Recipients of NASA 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 and the Department

of Commerce's Minority Business Development Agency in the solicitation

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

business enterprises.

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 14 CFR part 1265, t

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