DoD Grant and Agreement Regulations

SUMMARY: The Department of Defense is taking the next step toward

establishing the DoD Grant and Agreement Regulations. They are being

established to satisfy a need for uniform policies and procedures for

DoD Components' award and administration of grants and cooperative

agreements.

The Department of Defense proposes to add four new parts and to

make minor amendments that update two of the four existing parts of the

DoD Grant and Agreement Regulations. The four proposed new parts:

address DoD Components' overall management of grant and agreement

functions; set forth DoD Components' and grants officers'

responsibilities related to the award and administration of grants and

agreements; implement administrative requirements in OMB Circular A-110

for grants and agreements awarded to institutions of higher education

and other nonprofit organizations; and establish administrative

requirements for awards to commercial organizations. The proposed minor

amendments to two existing parts: provide DoD-specific procedures

related to Governmentwide restrictions on lobbying; and update

administrative requirements for awards to State and local governments,

to conform with recent changes in statutes and statutory

implementation.

DATES: Comments are due on or before October 25, 1996.

ADDRESSES: Forward comments to ODDR&E(R), ATTN: Mark Herbst, 3080

Defense Pentagon, Washington, DC 20301-3080.

FOR FURTHER INFORMATION CONTACT: Mark Herbst, (703) 614-0205.

SUPPLEMENTARY INFORMATION:

Steps Taken to Date To Establish the DoD Grant and Agreement

Regulations

In 1992, the Department of Defense (DoD) took the first step toward

establishing the DoD Grant and Agreement Regulations. At that time (see

57 FR 6199, February 21, 1992), DoD redesignated into Subchapter B of

Chapter I of Title 32 of the Code of Federal Regulations three

Governmentwide rules: debarment, suspension, and drug-free workplace

requirements, now at 32 CFR Part 25; lobbying restrictions, now at 32

CFR Part 28; and administrative requirements for grants and cooperative

agreements to State and local governments, now at 32 CFR Part 33.

The Department of Defense now takes the second step toward

establishing the regulations. In this second step, the Department

proposes to make minor amendments to update the existing parts 28 and

33 in Subchapter B of Chapter I, and to adopt the new parts 21, 22, 32,

and 34.

Additional Information About Proposed Amendments to Parts 28 and 33

The proposed amendments to part 28, ``New Restrictions on

Lobbying,'' would implement the DoD-specific statutory authority to

waive certain restrictions. The proposed amendments to part 33,

``Uniform Administrative Requirements for Grants and Cooperative

Agreements to State and Local Governments,'' are needed to implement

the Resource Conservation and Recovery Act (42 U.S.C. 6962) and

statutory changes made by the Federal Acquisition Streamlining Act of

1994.

Additional Information About Proposed Parts 21 and 22

Parts 21 and 22 primarily establish internal DoD policies and

procedures. Part 21 addresses DoD Components' overall management of

grant and cooperative agreement functions. Part 22 outlines grants

officers' and DoD Components' responsibilities related to the award and

administration of grants and cooperative agreements.

In addition to establishing internal policies and procedures, the

proposed parts 21 and 22 implement several statutes that apply to DoD

grants and agreements, including: requirements in 31 U.S.C. 6101, et

seq., to report data on assistance awards and programs (implemented in

subpart C, part 21); provisions of 31 U.S.C. 6301, et seq., concerning

the appropriate use of grants and cooperative agreements (implemented

in subpart B, part 22); and statutes concerning the use of competitive

procedures, such as 10 U.S.C. 2374 (implemented in subpart C, part 22),

which was enacted by the Federal Acquisition Streamlining Act of 1994.

To reduce burdens on recipients, section 22.510 of the proposed

part 22 allows a streamlined certification method that reduces the

paperwork associated with obtaining required certifications. This is

consistent with the National Performance Review's recommendation that

the Government explore methods for eliminating needless paperwork by

simplifying the compliance certification process, a recommendation that

the Department of Defense heartily supports. The Department expects

that initiatives to increase the use of electronic commerce in agency

announcements of programs, recipients' submission of proposals, and

transmission of award documents, ultimately will enable even less

burdensome means for obtaining required certifications than the method

proposed in part 22.

One section within subpart E of the proposed part 22 is reserved,

because DoD intends to redesignate an existing rule into that section

when part 22 is finalized. That rule, currently codified at 32 CFR Part

23, implements a law concerning military recruiters' access to

university campuses.

Additional Information About Proposed Part 32

The proposed part 32 specifies administrative requirements for

grants and cooperative agreements with universities and other non-

profit organizations. It thereby implements the Governmentwide guidance

in the updated, OMB Circular A-110, ``Uniform Administrative

Requirements for Grants and Agreements With Institutions of Higher

Education, Hospitals, and Other Non-Profit Organizations.''

During the comment period on the proposed part 32, and until DoD

adopts a final version as its implementation of the November, 1993,

version of OMB Circular A-110 [58 FR 62992], DoD Components will

incorporate terms and conditions in grants and cooperative agreements

to universities and other nonprofit entities that provide for

recipients' administration of those awards in accordance with that

updated version of the Circular. Most DoD Components' awards already do

so, an interim practice that was authorized in February, 1994. By

standardizing this interim practice within the remaining DoD

Components, DoD will provide uniform requirements that parallel those

of other Federal agencies, thereby alleviating unnecessary burdens on

recipients. Award terms and conditions will provide for compliance with

part 32 when it is finalized, superseding the interim practice.

The proposed part 32 adopts the language of the updated OMB

Circular, except for clarifying changes and a few changes to reduce

paperwork requirements and conform the rule to recent changes in

regulation and statute. None of the clarifying changes are intended to

deviate from the substance

[[Page 43868]]

in the Circular. The few other changes are as follows:

In keeping with the spirit of the National Performance

Review and the Circular, the proposed section 32.44 would reduce

reporting and record keeping burdens on small entities. It provides

that recipients that receive less than $10 million annually in contract

and grant funding will not be required to have written procurement

procedures. With this change, the requirements of part 32 will be more

comparable to those applicable to contractors under the Federal

Acquisition Regulations.

The proposed part 32 deletes provisions of the Circular

concerning the Cash Management Improvement Act (CMIA). The Circular

language was based on the Department of Treasury's original

implementation of CMIA, which applied the Act's provisions to some

state universities. Subsequent to OMB's issuance of the Circular,

however, the Department of Treasury amended its regulations

implementing CMIA, to exclude state universities from the coverage.

The proposed part 32 updates references to the small

purchase threshold (previously $25,000) fixed at 41 U.S.C. 403(11), to

reflect the simplified acquisition threshold (currently $100,000)

established at 41 U.S.C. 403(11) by the Federal Acquisition

Streamlining Act of 1994.

The proposed section 32.25 deletes Circular language that

authorizes a Federal agency to waive the requirement for recipients to

obtain the agency's approval before initiating a one-time, no-cost

extension of an award for a 12-month period. The language is deleted

because DoD incremental funding policies are to use a given fiscal

year's appropriations to support programmatic effort for specified

periods (e.g., research funds usually are for effort only through the

first three months of the next fiscal year). DoD Components therefore

must scrutinize requests for no-cost extensions, when those extensions

could lengthen by a year the period during which a given fiscal year's

appropriations would be used.

Additional Information About Proposed Part 34

The proposed part 34 specifies administrative requirements for

grants and for most cooperative agreements with commercial

organizations. Consistent with the updated OMB Circular A-110, which

states that ``Federal agencies may apply the provisions of this

Circular to commercial organizations . . . ,'' the proposed part 34

uses the Circular as its basis. It necessarily differs from Circular A-

110 in areas (e.g., exempt property) where the Circular's provisions

are specifically written for educational and nonprofit organizations.

In some other areas, such as procurement standards, the proposed part

34 lessens requirements and reduces administrative burdens that

otherwise would be applied to commercial organizations.

Remaining Step To Establish the DoD Grant and Agreement Regulations

The final major step in establishing the DoD Grant and Agreement

Regulations will be to adopt one additional part on selected research

agreements with commercial organizations. That part, which currently is

being prepared, is intended to provide more flexible administrative

requirements than those in the proposed part 34. The greater

flexibility would be available for a certain class of research

agreements that is designed to help integrate the defense and non-

defense portions of the U.S. technology and industrial bases.

Executive Order 12866

The proposed part 32 was determined to be a ``significant

regulatory action,'' as defined by Executive Order 12866, by the

Administrator of OMB's Office of Information and Regulatory Affairs.

The Department of Defense believes that none of the proposed rules

will: (1) have an annual effect on the economy of $100 million or more

or adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities; (2) create a serious inconsistency or otherwise interfere

with an action taken or planned by another agency; (3) materially alter

the budgetary impact of entitlements, grants, user fees, or loan

programs or the rights and obligations of recipients thereof; or (4)

raise novel legal or policy issues arising out of legal mandates, the

President's priorities, or the principles set forth in Executive Order

12866.

Regulatory Flexibility Act of 1980 [5 U.S.C. 605(b)]

These regulatory actions will not have a significant adverse impact

on a substantial number of small entities.

Paperwork Reduction Act of 1995 (44 U.S.C. 3500 et seq.)

These regulatory actions will not impose any new reporting or

recordkeeping requirements under the Paperwork Reduction Act. Reporting

and recordkeeping requirements in the proposed parts 32 and 34 are

those promulgated by the updated OMB Circular A-110, which the Office

of Mangement and Budget proposed in August, 1992 [57 FR 39018], asking

for public comments, and finalized in November, 1993 [58 FR 62992].

List of Subjects

32 CFR Part 21

Grant programs, Grants administration.

32 CFR Part 22 -

Accounting, Grant programs, Grants administration,

Intergovernmental relations, Reporting and recordkeeping requirements.

32 CFR Part 28 -

Grant programs, Loan programs, Lobbying, Penalties, Reporting and

recordkeeping requirements.

32 CFR Part 32 -

Accounting, Colleges and universities, Grant programs, Grants

administration, Hospitals, Nonprofit organizations, Reporting and

recordkeeping requirements.

32 CFR Part 33 -

Accounting, Grant programs, Grants administration, Indians,

Intergovernmental relations, Reporting and recordkeeping requirements.

32 CFR Part 34 -

Accounting, Business and industry, Grant programs, Grants

administration, Reporting and recordkeeping requirements.

Accordingly, Title 32 of the Code of Federal Regulations, Chapter

I, Subchapter B, is proposed to be amended as follows.

1. The heading of Subchapter B is proposed to be revised to read as

follows:

SUBCHAPTER B--DoD GRANT AND AGREEMENT REGULATIONS

2. Part 21 is proposed to be added to read as follows:

PART 21--DoD GRANTS AND AGREEMENTS--GENERAL MATTERS

Subpart A--Defense Grant and Agreement Regulatory System

Sec.

21.100 Scope.

21.105 Authority, purpose, and issuance.

21.110 Applicability and relationship to acquisition regulations.

21.115 Compliance and implementation.

21.120 Publication and maintenance.

21.125 Deviations.

21.130 Definitions.

[[Page 43869]]

Subpart B--Authorities and Responsibilities

21.200 Purpose.

21.205 DoD Components' authorities.

21.210 Vesting and delegation of authority.

21.215 Contracting activities.

21.220 Grants officers.

Subpart C--Grants Information

21.300 Purpose.

21.305 Defense Assistance Awards Data System.

21.310 Catalog of Federal Domestic Assistance.

21.315 Uniform grants and agreements numbering system.

Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

Subpart A--Defense Grant and Agreement Regulatory System

Sec. 21.100 Scope.

The purposes of this part, which is one portion of the DoD Grant

and Agreement Regulations (DoDGARs), are to: -

(a) Provide general information about the DoDGARs. -

(b) Set forth general policies and procedures related to DoD

Components' overall management of functions related to grants and

cooperative agreements.

Sec. 21.105 Authority, purpose, and issuance.

(a) DoD Directive 3210.6 \1\ established the Defense Grant and

Agreement Regulatory System (DGARS). The directive authorized

publication of policies and procedures comprising the DGARS in the DoD

Grant and Agreement Regulations (DoDGARs), in DoD instructions, and in

other DoD publications, as appropriate. Thus, the DoDGARs are one

element of the DGARS.

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\1\ Copies may be obtained, at cost, from the National Technical

Information Service, 5285 Port Royal Road, Springfield, VA 22161.

Authorized users may also obtain copies from the Defense Technical

Information Center, 8725 John J. Kingman Rd., Suite 0944, Fort

Belvoir, VA 22060-6218.

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(b) The purposes of the DoDGARs, in conjunction with other elements

of the DGARS, are to provide uniform policies and procedures for grants

and cooperative agreements awarded by DoD Components, in order to meet

DoD needs for:

(1) Efficient program execution, effective program oversight, and

proper stewardship of Federal funds.

(2) Compliance with relevant statutes; Executive orders; and

applicable guidance, such as Office of Management and Budget (OMB)

circulars.

(3) Collection from DoD Components, retention, and dissemination of

management and fiscal data related to grants and agreements.

(c) The Director of Defense Research and Engineering, or his or her

designee:

(1) Develops and implements DGARS policies and procedures.

(2) Issues and maintains the DoD Grant and Agreement Regulations

and other DoD publications that comprise the DGARS.

Sec. 21.110 Applicability and relationship to acquisition regulations.

(a) Applicability to grants and cooperative agreements. The DoD

Grant and Agreement Regulations (DoDGARs) apply to all DoD grants and

cooperative agreements.-

(b) Applicability to other nonprocurement instruments. (1) In

accordance with DoD Directive 3210.6, the DoDGARs may include rules

that apply to other nonprocurement instruments, when specifically

required in order to implement a statute, Executive order, or

Governmentwide rule that applies to other nonprocurement instruments,

as well as to grants and cooperative agreements. For example, the rule

on nonprocurement debarment and suspension in 32 CFR part 25, subparts

A through E, applies to all nonprocurement transactions, including

grants, cooperative agreements, contracts of assistance, loans and loan

guarantees (see definition of ``primary covered transaction'' at 32 CFR

25.110(a)(1)(i)). -

(2) The following is a list of DoDGARs rules that apply not only to

grants and cooperative agreements, but also to other types of

nonprocurement instruments: -

(i) Requirements for reporting to the Defense Assistance Award Data

System, in subpart C of this part. -

(ii) The rule on nonprocurement debarment and suspension in 32 CFR

part 25, subparts A through E. -

(iii) Drug-free workplace requirements in 32 CFR part 25, subpart

F. -

(iv) Restrictions on lobbying in 32 CFR part 28. -

(v) Administrative requirements for grants, cooperative agreements,

and other financial assistance to: -

(A) Universities and other nonprofit organizations, in 32 CFR part

32. -

(B) State and local governments, in 32 CFR part 33. -

(3) Grants officers should be aware that each rule that applies to

other types of nonprocurement instruments (i.e., other than grants and

cooperative agreements) states its applicability to such instruments.

However, grants officers must exercise caution when determining the

applicability of some Governmentwide rules that are included in the

DoDGARs, because a term may be defined differently in a Governmentwide

rule than it is defined elsewhere in the DoDGARs. For example, the

Governmentwide implementation of the Drug-Free Workplace Act of 1988

(32 CFR part 25, subpart F) states that it applies to grants, but

defines ``grants'' to include cooperative agreements and other forms of

financial assistance. -

(c) Relationship to acquisition regulations. The Federal

Acquisition Regulation (FAR) (48 CFR parts 1-53), the Defense Federal

Acquisition Regulation Supplement (DFARS) (48 CFR parts 201-270), and

DoD Component supplements to the FAR and DFARS apply to DoD Components'

procurement contracts used to acquire goods and services for the direct

benefit or use of the Federal Government. Policies and procedures in

the FAR and DFARS do not apply to grants, cooperative agreements, or

other nonprocurement transactions unless the DoDGARs specify that they

apply.

Sec. 21.115 Compliance and implementation. -

The Head of each DoD Component that awards or administers grants

and cooperative agreements, or his or her designee: -

(a) Is responsible for ensuring compliance with the DoDGARs within

that DoD Component. -

(b) May authorize the issuance of regulations, procedures, or

instructions that are necessary to implement DGARS policies and

procedures within the DoD Component, or to supplement the DoDGARs to

satisfy needs that are specific to the DoD Component, as long as such

regulations, procedures, or instructions do not impose additional costs

or administrative burdens on recipients or potential recipients. Heads

of DoD Components or their designees shall establish policies and

procedures in areas where uniform policies and procedures throughout

the DoD Component are required, such as for: -

(1) Requesting class deviations from the DoDGARs (see Sec. 21.125)

or exemptions from the provisions of 31 U.S.C. 6301 et seq., that

govern the appropriate use of contracts, grants, and cooperative

agreements (see 32 CFR 22.220). -

(2) Designating one or more Grant Appeal Authorities to resolve

claims, disputes, and appeals (see 32 CFR 22.815). -

(3) Reporting data on assistance awards and programs, as required

by 31 U.S.C. chapter 61 (see subpart C of this part). -

(4) Prescribing requirements for use and disposition of real

property acquired under awards, if the DoD

[[Page 43870]]

Component makes any awards to institutions of higher education or to

other nonprofit organizations under which real property is acquired in

whole or in part with Federal funds (see 32 CFR 32.32).

Sec. 21.120 Publication and maintenance. -

(a) The DoDGARs are published as Chapter I, Subchapter B, Title 32

of the Code of Federal Regulations (CFR) and in a separate loose-leaf

edition. The loose-leaf edition is divided into parts, subparts, and

sections, to parallel the CFR publication. Cross-references within the

DoDGARs are stated as CFR citations (e.g., a reference to section

21.115 in part 21 would be to 32 CFR 21.115). -

(b) Updates to the DoDGARs are published in the Federal Register.

When finalized, updates also are published as Defense Grant and

Agreement Circulars, with revised pages for the separate, loose-leaf

edition. -

(c) Revisions to the DoDGARs are recommended to the Director of

Defense Research and Engineering (DDR&E) by a standing working group.

The DDR&E, Director of Defense Procurement, and each Military

Department shall be represented on the working group. Other DoD

Components that use grants or cooperative agreements may also nominate

representatives. The working group meets when necessary.

Sec. 21.125 Deviations.

(a) The Head of the DoD Component or his or her designee may

authorize individual deviations from the DoDGARs, which are deviations

that affect only one grant or agreement, if such deviations are not

prohibited by statute, executive order or regulation.

(b) Class deviations that affect more than one grant or agreement

must be approved in advance by the Director, Defense Research and

Engineering (DDR&E) or his or her designee. Note that OMB concurrence

also is required for deviations from two parts of the DoDGARs, 32 CFR

parts 32 and 33, in accordance with 32 CFR 32.4 and 33.6, respectively.

(c) Copies of justifications and agency approvals for individual

deviations and written requests for class deviations shall be submitted

to:--Deputy Director, Defense Research and Engineering, ATTN: Research,

3080 Defense Pentagon, Washington D.C. 20301-3080.

(d) Copies of requests and approvals for individual and class

deviations shall be maintained in award files.

Sec. 21.130 Definitions.

Acquisition. The acquiring (by purchase, lease, or barter) of

property or services for the direct benefit or use of the United States

Government (see more detailed definition at 48 CFR 2.101). In

accordance with 31 U.S.C. 6303, procurement contracts are the

appropriate legal instruments for acquiring such property or services.

Assistance. The transfer of a thing of value to a recipient to

carry out a public purpose of support or stimulation authorized by a

law of the United States (see 31 U.S.C. 6101(3)). Grants and

cooperative agreements are examples of legal instruments used to

provide assistance.

Contract. See the definition for procurement contract in this

section.

Contracting activity. An activity to which the Head of a DoD

Component has delegated broad authority regarding acquisition

functions, pursuant to 48 CFR 1.601.

Contracting officer. A person with the authority to enter into,

administer, and/or terminate contracts and make related determinations

and findings. A more detailed definition of the term appears at 48 CFR

2.101.

Cooperative agreement. A legal instrument which, consistent with 31

U.S.C. 6305, is used to enter into the same kind of relationship as a

grant (see definition ``grant''), except that substantial involvement

is expected between the Department of Defense and the recipient when

carrying out the activity contemplated by the cooperative agreement.

The term does not include ``cooperative research and development

agreements'' as defined in 15 U.S.C. 3710a.

Deviation. The issuance or use of a policy or procedure that is

inconsistent with the DoDGARs.

DoD Components. The Office of the Secretary of Defense, the

Military Departments, the Defense Agencies, and DoD Field Activities.

Grant. A legal instrument which, consistent with 31 U.S.C. 6304, is

used to enter into a relationship:

(1) The principal purpose of which is to transfer a thing of value

to the recipient to carry out a public purpose of support or

stimulation authorized by a law of the United States, rather than to

acquire property or services for the Department of Defense's direct

benefit or use.

(2) In which substantial involvement is not expected between the

Department of Defense and the recipient when carrying out the activity

contemplated by the grant.

Grants officer. An official with the authority to enter into,

administer, and/or terminate grants or cooperative agreements.

Nonprocurement instrument. A legal instrument other than a

procurement contract. Examples include instruments of financial

assistance, such as grants or cooperative agreements, and those of

technical assistance, which provide services in lieu of money.

Procurement contract. A legal instrument which, consistent with 31

U.S.C. 6303, reflects a relationship between the Federal Government and

a State, a local government, or other person when the principal purpose

of the instrument is to acquire property or services for the direct

benefit or use of the Federal Government. See the more detailed

definition for contract at 48 CFR 2.101.

Recipient. An organization or other entity receiving a grant or

cooperative agreement from a DoD Component.

Subpart B--Authorities and Responsibilities

Sec. 21.200 Purpose.

This subpart describes the sources and flow of authority to use

grants and cooperative agreements, and assigns the broad

responsibilities associated with DoD Components' use of such

instruments.

Sec. 21.205 DoD Components' authorities.

(a) In accordance with 31 U.S.C. 6301 et seq., DoD Components shall

use grants and cooperative agreements as legal instruments reflecting

assistance relationships between the United States Government and

recipients.

(b) Unlike the use of procurement contracts (for which Federal

agencies have inherent, Constitutional authority), use of grants or

cooperative agreements requires specific statutory authority. DoD

Components may award grants and cooperative agreements under a number

of statutory authorities that fall into three categories:

(1) Authorities that statutes provide to the Secretary of Defense.

These authorities generally are delegated by the Secretary of Defense

to Heads of DoD Components, usually through DoD directives,

instructions, or policy memoranda that are not part of the Defense

Grant and Agreement Regulatory System. Examples of statutory

authorities in this category are:

(i) Authority under 10 U.S.C. 2391 to make grants or conclude

cooperative agreements to assist State and local governments in

planning and carrying out community adjustments and economic

diversification required by changes in military installations or in DoD

contracts or spending that may have a direct and significant adverse

[[Page 43871]]

consequence on the affected community.

(ii) Authority under 10 U.S.C. 2413 to enter into cooperative

agreements with entities that furnish procurement technical assistance

to businesses.

(2) Authorities that statutes may provide directly to Heads of DoD

Components. For example, 10 U.S.C. 2358 authorizes the Secretaries of

the Military Departments, in addition to the Secretary of Defense, to

perform research and development projects through grants and

cooperative agreements. A Military Department's use of the authority of

10 U.S.C. 2358 therefore requires no delegation by the Secretary of

Defense.

(3) Authorities that arise indirectly as the result of statute. For

example, authority to use a grant or cooperative agreement may result

from:

(i) A federal statute authorizing a program that is consistent with

an assistance relationship (i.e., the support or stimulation of a

public purpose, rather than the acquisition of a good or service for

the direct benefit of the Department of Defense). In accordance with 31

U.S.C. chapter 63, such a program would appropriately be carried out

through the use of grants or cooperative agreements.

(ii) Exemptions requested by the Department of Defense and granted

by the Office of Management and Budget under 31 U.S.C. 6307, as

described in 32 CFR 22.220.

Sec. 21.210 Vesting and delegation of authority.

(a) The authority and responsibility for awarding grants and

cooperative agreements is vested in the Head of each DoD Component that

has such authority.

(b) The Head of each such DoD Component, or his or her designee,

may delegate to the heads of contracting activities (HCAs) within that

Component, authority to award grants or cooperative agreements, to

appoint grants officers (see Sec. 21.220(c)), and to broadly manage the

DoD Component's functions related to grants and agreements. An HCA is

the same official (or officials) designated as the head of the

contracting activity for procurement contracts, as defined at 48 CFR

2.101--the intent is that overall management responsibilities for a DoD

Component's functions related to nonprocurement instruments be assigned

only to officials that have similar responsibilities for procurement

contracts.

Sec. 21.215 Contracting activities.

When designated by the Head of the DoD Component or his or her

designee (see 32 CFR 22.210(b)), the HCA is responsible for the grants

and cooperative agreements made by or assigned to that activity. He or

she shall supervise and establish internal policies and procedures for

that activity's assistance awards.

Sec. 21.220 Grants officers. -

(a) Authority. Only grants officers are authorized to sign grants

or cooperative agreements, or to administer or terminate such legal

instruments on behalf of the Department of Defense. Grants officers may

bind the Government only to the extent of the authority delegated to

them. -

(b) Responsibilities. Grants officers should be allowed wide

latitude to exercise judgment in performing their responsibilities.

Grants officers are responsible for ensuring that: --

(1) Individual grants and cooperative agreements are used

effectively in the execution of DoD programs, and are awarded and

administered in accordance with applicable laws, Executive orders,

regulations, and DoD policies. --

(2) Sufficient funds are available for obligation. --

(3) Recipients of grants and cooperative agreements receive

impartial, fair, and equitable treatment. -

(c) Selection, appointment and termination of appointment of grants

officers. Each DoD Component that awards grants or enters into

cooperative agreements shall have a formal process (see Sec. 21.210(b))

to select and appoint grants officers and terminate their appointments.

DoD Components are not required to maintain a selection process for

grants officers separate from the selection process for contracting

officers, and written statements of appointment or termination for

grants officers may be integrated into the necessary documentation for

contracting officers, as appropriate. --

(1) Selection. In selecting grants officers, appointing officials

shall consider the complexity and dollar value of the grants and

agreements to be assigned and judge whether candidates possess the

necessary experience, training, education, business acumen, judgment,

and knowledge of contracts and assistance instruments to function

effectively as grants officers. --

(2) Appointment. Statements of appointment shall be in writing and

shall clearly state the limits of grants officers' authority, other

than limits contained in applicable laws or regulations. Information on

the limits of a grants officer's authority shall be readily available

to the public and agency personnel. --

(3) Termination. Written statements of termination are required,

unless the written statement of appointment provides for automatic

termination. No termination shall be retroactive.

Subpart C--Grants Information

Sec. 21.300 Purpose. -

This subpart prescribes policies and procedures for compiling and

reporting data related to grants, cooperative agreements, and other

nonprocurement instruments subject to information reporting

requirements of 31 U.S.C. chapter 61.

Sec. 21.305 Defense Assistance Awards Data System. -

(a) Purposes of the system. Data from the Defense Assistance Awards

Data System (DAADS) are used to provide: --

(1) DoD inputs to meet statutory requirements for Federal

Governmentwide reporting of data related to obligations of funds by

grant, cooperative agreement, or other nonprocurement instrument. --

(2) A basis for meeting Governmentwide requirements to report to

the Federal Assistance Awards Data System maintained by the Department

of Commerce and for preparing other recurring and special reports to

the President, the Congress, the General Accounting Office, and the

public. --

(3) Information to support policy formulation and implementation

and to meet management oversight requirements related to the use of

grants, cooperative agreements, and other nonprocurement instruments. -

(b) Responsibilities. (1) The Deputy Director, Defense Research and

Engineering (DDDR&E), or his or her designee, shall issue the manual

described in paragraph (b)(2)(ii) of this section. --

(2) The Director for Information Operations and Reports, Washington

Headquarters Services (DIOR, WHS) shall, consistent with guidance

issued by the DDDR&E:----

(i) Process DAADS information on a quarterly basis and prepare

recurring and special reports using such information. ----

(ii) Prepare, update, and disseminate ``Department of Defense

Assistance Awards Data System,'' an instruction manual for reporting

information to DAADS. The manual, which shall be issued by the office

of the DDR&E, shall specify procedures, formats, and editing processes

to be used by DoD Components, including magnetic tape layout and error

correction schedules. --

(3) The following offices shall serve as central points for

collecting DAADS

[[Page 43872]]

information from contracting activities within the DoD Components: ----

(i) For the Army: As directed by the U.S. Army Contracting Support

Agency. ----

(ii) For the Navy: As directed by the Office of Naval Research. ---

-

(iii) For the Air Force: As directed by SAF/AQCP. ----

(iv) For the Office of the Secretary of Defense, Defense Agencies,

and DoD Field Activities: Each Defense Agency shall identify a central

point for collecting and reporting DAADS information to the DIOR, WHS,

at the address given in paragraph (c)(2) of this section. DIOR, WHS

shall serve as the central point for offices and activities within the

Office of the Secretary of Defense and for DoD Field Activities. --

(4) The office that serves, in accordance with paragraph (b)(3) of

this section, as the central point for collecting DAADS information

from contracting activities within each DoD Component shall: ----

(i) Establish internal procedures to ensure reporting by

contracting activities that use grants, cooperative agreements or other

nonprocurement instruments subject to 31 U.S.C. chapter 61. ----

(ii Collect information required by DD Form 2566, ``DoD Assistance

Award Action Report,'' from those contracting activities, and report it

to DIOR, WHS, in accordance with paragraph (d) of this section. ----

(iii) Submit to the DDDR&E, at the address given in Sec. 21.125(c),

any recommended changes to the DAADS or to the instruction manual

described in paragraph (b)(2)(ii) of this section. -

(c) Reporting procedures. The data required by the DD Form 2566

shall be: --

(1) Collected for each individual grant, cooperative agreement, or

other nonprocurement action that is subject to 31 U.S.C. chapter 61 and

involves the obligation or deobligation of Federal funds. Each action

is reported as an obligation under a specific program listed in the

Catalog of Federal Domestic Assistance (CFDA, see Sec. 21.310). The

program to be shown is the one that provided the funds being obligated

(i.e., if a grants officer in one DoD Component obligates

appropriations of another DoD Component's program, the grants officer

would show the CFDA program of the second DoD Component on the DD Form

2566). --

(2) Reported on a quarterly basis to DIOR, WHS by the offices that

are designated pursuant to paragraph (b)(3) of this section. For the

first three quarters of the Federal fiscal year, the data are due by

close-of-business (COB) on the 15th day after the end of the quarter

(i.e., first-quarter data are due by COB on January 15th, second-

quarter data by COB April 15th, and third-quarter data by COB July

15th). Fourth-quarter data are due by COB October 25th, the 25th day

after the end of the quarter. If any due date falls on a weekend or

holiday, the data are due on the next regular workday. The mailing

address for DIOR, WHS is 1215 Jefferson Davis Highway, Suite 1204,

Arlington, VA 22202-4302. --

(3) Reported on a computer tape, floppy diskette or by other means

permitted by the instruction manual described in paragraph (b)(2)(ii)

of this section. The data shall be reported in the format specified in

the instruction manual. -

(d) Report control symbol. DoD Components' reporting of DAADS data

is used by DoD to satisfy Governmentwide requirements to report to the

Federal Assistance Awards Data System, which is assigned Interagency

Report Control Number 0252-DOC-QU.

Sec. 21.310 Catalog of Federal Domestic Assistance.

(a) Purpose and scope of the reporting requirement. (1) Under the

Federal Program Information Act (31 U.S.C. 6101 et seq.), as

implemented through OMB Circular A-89,\2\ the Department of Defense is

required to provide certain information about its domestic assistance

programs to OMB and the General Services Administration (GSA). GSA

makes this information available to the public by publishing it in the

Catalog of Federal Domestic Assistance (CFDA) and maintaining the

Federal Assistance Programs Retrieval System, a computerized data base

of the information.

---------------------------------------------------------------------------

\2\ Contact the Office of Management and Budget, EOP

Publications, 725 17th St. N.W., New Executive Office Building,

Washington, D.C. 20503.

---------------------------------------------------------------------------

(2) The CFDA covers all domestic assistance programs and

activities, regardless of the number of awards made under the program,

the total dollar value of assistance provided, or the duration. In

addition to programs using grants and cooperative agreements, covered

programs include those providing assistance in other forms, such as

payments in lieu of taxes or indirect assistance resulting from Federal

operations.

(b) Responsibilities. (1) Each DoD Component that provides domestic

financial assistance shall:

(i) Report to the Director for Information Operations and Reports,

Washington Headquarters Services (DIOR, WHS) all new programs and

changes as they occur, or as DIOR, WHS requests annual updates to

existing CFDA information.

(ii) Identify to the DIOR, WHS a point-of-contact who will be

responsible for reporting such program information and for responding

to inquiries related to it.

(2) The DIOR, WHS shall act as the Department of Defense's single

office for collecting, compiling and reporting such program information

to OMB and GSA.

Sec. 21.315 Uniform grants and agreements numbering system.

DoD Components shall assign identifying numbers to all

nonprocurement instruments subject to this subpart, including grants

and cooperative agreements. The numbering system parallels the

procurement instrument identification (PII) numbering system specified

in 48 CFR 204.70 (in the ``Defense Federal Acquisition Regulation

Supplement''), as follows:

(a) The first six alphanumeric characters of the assigned number

shall be identical to those specified by 48 CFR 204.7003(a)(1) to

identify the DoD Component and contracting activity.

(b) The seventh and eighth positions shall be the last two digits

of the fiscal year in which the number is assigned to the grant,

cooperative agreement, or other nonprocurement instrument.

(c) The 9th position shall be a number: ``1'' for grants; ``2'' for

cooperative agreements; and ``3'' for other nonprocurement instruments.

(d) The 10th through 13th positions shall be the serial number of

the instrument. DoD Components and contracting activities need not

follow any specific pattern in assigning these numbers and may create

multiple series of letters and numbers to meet internal needs for

distinguishing between various sets of awards.

3. Part 22 is proposed to be added to read as follows:

PART 22--DoD GRANTS AND AGREEMENTS--AWARD AND ADMINISTRATION

Subpart A--General

Sec.

22.100 Purpose, relation to other parts, and organization.

22.105 Definitions.

Subpart B--Selecting the Appropriate Instrument

22.200 Purpose.

22.205 Distinguishing assistance from procurement.

22.210 Authority for providing assistance.

22.215 Distinguishing grants and cooperative agreements.

22.220 Exemptions.

Subpart C--Competition

22.300 Purpose.

22.305 General policy and requirement for competition.

[[Page 43873]]

22.310 Statutes concerning certain research, development, and

facilities construction grants.

22.315 Merit-based, competitive procedures.

22.320 Special competitions.

Subpart D--Recipient Qualification Matters--General Policies and

Procedures

22.400 Purpose.

22.405 Policy.

22.410 Grants officers' responsibilities.

22.415 Standards.

22.420 Pre-award procedures.

Subpart E--National Policy Matters

22.505 Purpose.

22.510 Certifications, representations, and assurances.

22.515 Provisions of annual appropriations acts.

22.520 Military recruiting on campus. [Reserved]

22.525 Paperwork Reduction Act.

22.530 Metric system of measurement.

Subpart F--Award

22.600 Purpose.

22.605 Grants officers' responsibilities.

22.610 Award instruments.

Subpart G--Field Administration

22.700 Purpose.

22.705 Policy.

22.710 Assignment of grants administration offices.

22.715 Grants administration office functions.

Subpart H--Post-Award Administration

22.800 Purpose and relation to other parts.

22.805 Post-award requirements in other parts.

22.810 Payments.

22.815 Claims, disputes, and appeals.

22.820 Debt collection.

22.825 Closeout audits.

Appendix A to Part 22--Suggested Proposal Provision for Required

Certifications

Appendix B to Part 22--Suggested Award Provisions for National Policy

Requirements That Often Apply

Appendix C to Part 22--Administrative Requirements and Issues To Be

Addressed in Award Terms and Conditions

Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

Subpart A--General

Sec. 22.100 Purpose, relation to other parts, and organization.

(a) This part outlines grants officers' and DoD Components'

responsibilities related to the award and administration of grants and

cooperative agreements.

(b) In doing so, it also supplements other parts of the DoD Grant

and Agreement Regulations (DoDGARs) that are either Governmentwide

rules or DoD implementation of Governmentwide guidance in Office of

Management and Budget (OMB) Circulars. Those other parts of the

DoDGARs, which are referenced as appropriate in this part, are:

(1) Governmentwide rules on debarment, suspension and drug-free

workplace requirements, in 32 CFR part 25.

(2) The Governmentwide rule on lobbying restrictions, in 32 CFR

part 28.

(3) Administrative requirements for grants and agreements awarded

to specific types of recipients:

(i) For State and local governmental organizations, in the

Governmentwide rule at 32 CFR part 33.

(ii) For institutions of higher education and other nonprofit

organizations, at 32 CFR part 32.

(iii) For commercial organizations, at 32 CFR part 34.

(c)-The organization of this part parallels the award and

administration process, from pre-award through post-award matters. It

therefore is organized in the same manner as the parts of the DoDGARs

(32 CFR parts 32, 33, and 34) that prescribe administrative

requirements for specific types of recipients.

Sec. 22.105 Definitions.

Other than the terms defined in this section, terms used in this

part are defined in 32 CFR 21.130.

Administrative offset. An action whereby money payable by the

United States Government to, or held by the Government for, a recipient

is withheld to satisfy a delinquent debt the recipient owes the

Government.

Advanced research. Advanced technology development that creates new

technology or demonstrates the viability of applying existing

technology to new products and processes in a general way. Advanced

research is most closely analogous to precompetitive technology

development in the commercial sector (i.e., early phases of research

and development on which commercial competitors are willing to

collaborate, because the work is not so coupled to specific products

and processes that the results of the work must be proprietary). It

does not include development of military systems and hardware where

specific requirements have been defined. It is typically funded in

Budget Activity 3 (6.3, Advanced Development, which formerly was

category ``6.3A,'' Advanced Technology Development), within Research,

Development, Test and Evaluation (RDT&E).

Applied research. Efforts that attempt to determine and exploit the

potential of scientific discoveries or improvements in technology such

as new materials, devices, methods and processes. It typically is

funded within Budget Activity 2 (6.2, Exploratory Development) within

Research, Development, Test and Evaluation (RDT&E). Applied research

normally follows basic research but may not be fully distinguishable

from the related basic research. The term does not include efforts

whose principal aim is the design, development, or testing of specific

products, systems or processes to be considered for sale or

acquisition; these efforts are within the definition of

``development.''

Basic research. Efforts directed toward increasing knowledge and

understanding in science and engineering, rather than the practical

application of that knowledge and understanding. It typically is funded

within Budget Activity 1 (6.1, Basic Research) within Research,

Development, Test and Evaluation (RDT&E). For the purposes of this

part, basic research includes:

(1) Research-related, science and engineering education, including

graduate fellowships and research traineeships.

(2) Research instrumentation and other activities designed to

enhance the infrastructure for science and engineering research.

Claim. A written demand or written assertion by one of the parties

to a grant or cooperative agreement seeking as a matter of right, the

payment of money in a sum certain, the adjustment or interpretation of

award terms, or other relief arising under or relating to a grant or

cooperative agreement. A routine request for payment that is not in

dispute when submitted is not a claim. The submission may be converted

to a claim by written notice to the grants officer if it is disputed

either as to liability or amount, or is not acted upon in a reasonable

time.

Debt. Any amount of money or any property owed to a Federal Agency

by any person, organization, or entity except another United States

Federal agency. Debts include any amounts due from insured or

guaranteed loans, fees, leases, rents, royalties, services, sales of

real or personal property, or overpayments, penalties, damages,

interest, fines and forfeitures, and all other claims and similar

sources. Amounts due a nonappropriated fund instrumentality are not

debts owed the United States, for the purposes of this subchapter.

Delinquent debt. A debt:

(1) That the debtor fails to pay by the date specified in the

initial written notice from the agency owed the debt, normally within

30 days, unless the debtor makes satisfactory payment

[[Page 43874]]

arrangements with the agency by that date; and

(2) With respect to which the debtor has elected not to exercise

any available appeals or has exhausted all agency appeal processes.

Development. The systematic use of scientific and technical

knowledge in the design, development, testing, or evaluation of

potential new products, processes, or services to meet specific

performance requirements or objectives. It includes the functions of

design engineering, prototyping, and engineering testing.

Electronic commerce. A wide range of functions related to grants

and cooperative agreements which are performed using data

communications techniques.

Electronic data interchange. The exchange of standardized

information communicated electronically between business partners,

typically between computers. It is DoD policy that DoD Component EDI

applications conform to the American National Standards Institute

(ANSI), Accredited Standards Committee (ASC) X-12 standard.\1\

---------------------------------------------------------------------------

\1\ Available from Accredited Standards Committee, X-12

Secretariat, Data Interchange Standards Association, 1800 Diagonal

Road, Suite 355, Alexandria, VA 22314-2852; Attention: Manager

Maintenance and Publications.

---------------------------------------------------------------------------

Electronic funds transfer. A system that provides the authority to

debit or credit accounts in financial institutions by electronic means

rather than source documents (e.g., paper checks). Processing typically

occurs through the Federal Reserve System and/or the Automated Clearing

House (ACH) computer network. It is DoD policy that DoD Component EFT

transmissions conform to the American National Standards Institute

(ANSI), Accredited Standards Committee (ASC) X-12 standard.

Historically Black colleges and universities. Institutions of

higher education determined by the Secretary of Education to meet the

requirements of 34 CFR 608.2. Each DoD Component's contracting

activities and grants officers may obtain a list of historically Black

colleges and universities from that DoD Component's Small and

Disadvantaged Business Utilization office.

Institution of higher education. An educational institution that

meets the criteria in section 1201(a) of the Higher Education Act of

1965 (20 U.S.C. 1141(a)).

Minority institutions. Institutions of higher education that meet

the criteria for minority institutions specified in 10 U.S.C. 2323.

Each DoD Component's contracting activities and grants officers may

obtain copies of a current list of institutions that qualify as

minority institutions under 10 U.S.C. 2323 from that DoD Component's

Small and Disadvantaged Business Utilization office (the list of

minority institutions changes periodically, based on Department of

Education data on institutions' enrollments of minority students).

Research. Basic, applied, and advanced research, as defined in this

section.

Subaward. An award of financial assistance in the form of money, or

property in lieu of money, made under a DoD grant or cooperative

agreement by a recipient to an eligible subrecipient. The term includes

financial assistance for substantive program performance by the

subrecipient of a portion of the program for which the DoD grant or

cooperative agreement was made. It does not include the recipient's

procurement of goods and services needed to carry out the program.

Subpart B--Selecting the Appropriate Instrument

Sec. 22.200 Purpose.

This subpart provides the bases for determining the appropriate

type of instrument in a given situation.

Sec. 22.205 Distinguishing assistance from procurement.

Before using a grant or cooperative agreement, the grants officer

shall make a positive judgment that an assistance instrument, rather

than a procurement contract, is the appropriate instrument, based on

the following:

(a) Purpose. (1) The grants officer must judge that the principal

purpose of the activity to be carried out under the instrument is to

stimulate or support a public purpose (i.e., to provide assistance),

rather than acquisition (i.e., to acquire goods and services for the

direct benefit of the United States Government). If the principal

purpose is acquisition, then the grants officer shall judge that a

procurement contract is the appropriate instrument, in accordance with

31 U.S.C. chapter 63 (``Using Procurement Contracts and Grant and

Cooperative Agreements''). Assistance instruments shall not be used in

such situations, except:

(i) When a statute specifically provides otherwise; or

(ii) When an exemption is granted, in accordance with Sec. 22.220.

(2) For research and development, the appropriate use of grants and

cooperative agreements therefore is almost exclusively limited to the

performance of selected basic, applied, and advanced research projects.

Development projects nearly always shall be performed by contract

because their principal purpose is the acquisition of specific

deliverable items (e.g., prototypes or other hardware) for the benefit

of the Department of Defense.

(b) Fee or profit. Payment of fee or profit is consistent with an

activity whose principal purpose is the acquisition of goods and

services for the direct benefit or use of the United States Government,

rather than an activity whose principal purpose is assistance.

Therefore, the grants officer shall use a procurement contract, rather

than an assistance instrument, in all cases where:

(1) Fee or profit is to be paid to the recipient of the instrument;

or

(2) The instrument is to be used to carry out a program where fee

or profit is necessary to achieving program objectives.

Sec. 22.210 Authority for providing assistance.

(a) Before a grant or cooperative agreement may be used, the grants

officer must:

(1) Identify the program statute, the statute that authorizes the

DoD Component to carry out the activity the principal purpose of which

is assistance (see 32 CFR 21.205(b)).

(2) Review the program statute to determine if it contains

requirements that affect the:

(i) Solicitation, selection, and award processes. For example,

program statutes may authorize assistance to be provided only to

certain types of recipients; may require that recipients meet certain

other criteria to be eligible to receive assistance; or require that a

specific process shall be used to review recipients' proposals.

(ii) Terms and conditions of the award. For example, some program

statutes require a specific level of cost sharing or matching.

(b) The grants officer shall ensure that the award of any grant or

cooperative agreement for a research project complies with the

requirements of 10 U.S.C. 2358, DoD's broad authority to carry out

research, even if the research project is authorized under a statutory

authority other than 10 U.S.C. 2358. This broadening of the

applicability of 10 U.S.C. 2358 to all research awards is a matter of

DoD policy. The requirements of 10 U.S.C. 2358 are that, in the opinion

of the Head of the DoD Component or his or her designee, the projects

must be:

(1) Necessary to the responsibilities of the DoD Component.

[[Page 43875]]

(2) Related to weapons systems and other military needs or of

potential interest to the DoD Component.

Sec. 22.215 Distinguishing grants and cooperative agreements.

(a) Once a grants officer judges, in accordance with Secs. 22.205

and 22.210, that either a grant or cooperative agreement is the

appropriate instrument, the grants officer shall distinguish between

the two instruments as follows:

(1) Grants shall be used when the grants officer judges that

substantial involvement is not expected between the Department of

Defense and the recipient when carrying out the activity contemplated

in the agreement.

(2) Cooperative agreements shall be used when the grants officer

judges that substantial involvement is expected. Under no circumstances

are cooperative agreements to be used solely to obtain the stricter

controls typical of a contract. The grants officer should document the

nature of the substantial involvement that led to selection of a

cooperative agreement.

(b) In judging whether substantial involvement is expected, grants

officers should recognize that ``substantial involvement'' is a

relative, rather than an absolute, concept, and that it is primarily

based on programmatic factors, rather than requirements for grant or

agreement award or administration. For example, substantial involvement

may include collaboration, participation, or intervention in the

program or activity to be performed under the award.

Sec. 22.220 Exemptions.

Under 31 U.S.C. 6307, the Director of the OMB is authorized to

exempt an agency transaction or program from the requirements of 31

U.S.C. chapter 63. Grants officers shall request such exemptions only

in exceptional circumstances. Each request shall specify for which

individual transaction or program the exemption is sought; the reasons

for requesting an exemption; the anticipated consequences if the

exemption is not granted; and the implications for other transactions

and programs if the exemption is granted. The procedures for requesting

exemptions shall be:

(a) In cases where 31 U.S.C. chapter 63 would require use of a

contract and an exemption from that requirement is desired:

(1) The grants officer shall submit a request for exemption,

through appropriate channels established by his or her DoD Component

(see 32 CFR 21.115(b)(1)), to the Director of Defense Procurement

(DDP).

(2) The DDP, after coordination with the Director of Defense

Research and Engineering (DDR&E), shall transmit the request to OMB or

notify the DoD Component that the request has been disapproved.

(b) In other cases, the DoD Component shall submit a request for

the exemption through appropriate channels to the DDR&E. The DDR&E

shall transmit the request to OMB or notify the DoD Component that the

request has been disapproved.

(c) Where an exemption is granted, documentation of the approval

shall be maintained in the award file.

Subpart C--Competition

Sec. 22.300 Purpose.

This subpart establishes DoD policy and implements statutes related

to the use of competitive procedures in the award of grants and

cooperative agreements.

Sec. 22.305 General policy and requirement for competition.

(a) It is DoD policy to maximize use of competition in the award of

grants and cooperative agreements. This also conforms with:

(1) 31 U.S.C. 6301(3), which encourages the use of competition in

awarding all grants and cooperative agreements.

(2) 10 U.S.C. 2374(a), which sets out Congressional policy that any

new grant for research, development, test, or evaluation be awarded

through merit-based selection procedures.

(b) Grants officers shall use merit-based, competitive procedures

(as defined by Sec. 22.315) to award grants and cooperative agreements:

(1) In every case where required by statute (e.g., 10 U.S.C. 2361,

as implemented in Sec. 22.310, for certain grants to institutions of

higher education).

(2) To the maximum extent practicable in all cases where not

required by statute.

Sec. 22.310 Statutes concerning certain research, development, and

facilities construction grants.

(a) Definitions specific to this section. For the purposes of

implementing the requirements of 10 U.S.C. 2374 in this section, the

following terms are defined:

(1) Follow-on grant. A grant that provides for continuation of

research and development performed by a recipient under a preceding

grant. Note that follow-on grants are distinct from incremental funding

actions during the period of execution of a multi-year award.

(2) New grant. A grant that is not a follow-on grant.

(b) Statutory requirement to use competitive procedures. (1) A

grants officer shall not award a grant by other than merit-based,

competitive procedures (as defined by Sec. 22.315) to an institution of

higher education for the performance of research and development or for

the construction of research or other facilities, unless:

(i) In the case of a new grant for research and development, there

is a statute meeting the criteria in paragraph (c)(1) of this section;

(ii) In the case of a follow-on grant for research and development,

or of a grant for the construction of research or other facilities,

there is a statute meeting the criteria in paragraph (c)(2) of this

section; and

(iii) The Secretary of Defense submits to Congress a written notice

of intent to make the grant. The grant may not be awarded until 180

days have elapsed after the date on which Congress received the notice

of intent. Contracting activities must submit a draft notice of intent

with supporting documentation through channels to the Deputy Director,

Defense Research and Engineering.

(2) Because subsequently enacted statutes may, by their terms,

impose different requirements than set out in paragraph (b)(1) of this

section, grants officers shall consult legal counsel on a case-by-case

basis, when grants for the performance of research and development or

for the construction of research or other facilities are to be awarded

to institutions of higher education by other than merit-based

competitive procedures.

(c) Subsequent statutes. In accordance with 10 U.S.C. 2361 and 10

U.S.C. 2374, a provision of law may not be construed as requiring the

award of a grant through other than the merit-based, competitive

procedures described in Sec. 22.315, unless:

(1) Institutions of higher education--new grants for research and

development. In the case of a new grant for research and development to

an institution of higher education, such provision of law specifically:

(i) Identifies the particular institution of higher education

involved;

(ii) States that such provision of law modifies or supersedes the

provisions of 10 U.S.C. 2361 (a requirement that applies only if the

statute authorizing or requiring award by other than competitive

procedures was enacted after September 30, 1989); and

[[Page 43876]]

(iii) States that the award to the institution of higher education

involved is required by such provision of law to be made in

contravention of the policy set forth in 10 U.S.C. 2374(a).

(2) Institutions of higher education--follow-on grants for research

and development and grants for the construction of any research or

other facility. In the case of any such grant to an institution of

higher education, such provision of law specifically:

(i) Identifies the particular institution of higher education

involved; and

(ii) States that such provision of law modifies or supersedes the

provisions of 10 U.S.C. 2361 (a requirement that applies only if the

statute authorizing or requiring award by other than competitive

procedures was enacted after September 30, 1989).

(3) Other entities--new grants for research and development--(i)

General. In the case of a new grant for research and development to an

entity other than an institution of higher education, such provision of

law specifically:

(A) Identifies the particular entity involved;

(B) States that the award to that entity is required by such

provision of law to be made in contravention of the policy set forth in

10 U.S.C. 2374(a).

(ii) Exception. The requirement of paragraph (c)(3)(i) of this

section does not apply to any grant that calls upon the National

Academy of Sciences to:

(A) Investigate, examine, or experiment upon any subject of science

or art of significance to the Department of Defense or any Military

Department; and

(B) Report on such matters to the Congress or any agency of the

Federal Government.

Sec. 22.315 Merit-based, competitive procedures.

Competitive procedures are methods that encourage participation in

DoD programs by a broad base of the most highly qualified performers.

These procedures are characterized by competition among as many

eligible proposers as possible, with a published or widely disseminated

notice. Competitive procedures include, as a minimum:

(a) Notice to prospective proposers. The notice may be a notice of

funding availability or Broad Agency Announcement published in the

Federal Register or Commerce Business Daily, respectively, or a notice

that is made available broadly by electronic means. Alternatively, it

may take the form of a specific notice that is distributed to eligible

proposers (a specific notice must be distributed to at least two

eligible proposers to be considered as part of a competitive

procedure). Notices must include, as a minimum, the following

information:

(1) Programmatic area(s) of interest, in which proposals or

applications are sought.

(2) Eligibility criteria for potential recipients (see subpart D of

this part).

(3) Criteria that will be used to select the applications or

proposals that will be funded, and the method for conducting the

evaluation.

(4) The type(s) of funding instruments (e.g., grants, cooperative

agreements, other assistance instruments, or procurement contracts)

that are anticipated to be awarded pursuant to the announcement.

(5) Instructions for preparation and submission of a proposal or

application, including the time by which it must be submitted.

(b) At least two eligible, prospective proposers.

(c) Impartial review of the merits of applications or proposals

received in response to the notice, using the evaluation method and

selection criteria described in the notice. For research and

development awards, in order to be considered as part of a competitive

procedure, the two principal selection criteria, unless statute

provides otherwise, must be the:

(1) Technical merits of the proposed research and development; and

(2) Potential relationship of the proposed research and development

to Department of Defense missions.

Sec. 22.320 Special competitions.

(a) General. Some programs may be competed for programmatic or

policy reasons among specific classes of potential recipients. An

example would be a program to enhance U.S. capabilities for academic

research and research-coupled graduate education in defense-critical,

science and engineering disciplines, a program that would be competed

specifically among institutions of higher education. All such special

competitions shall be consistent with program representations in the

President's budget submission to Congress and with subsequent

Congressional authorizations and appropriations for the programs.

(b) Historically Black colleges and universities (HBCUs) and other

minority institutions (MIs). Increasing the ability of HBCUs and MIs to

participate in federally funded, university programs is an objective of

Executive Order 12876 (3 CFR, 1993 Comp., p. 671) and 10 U.S.C. 2323.

Whenever practicable, grants officers shall reserve appropriate

programmatic areas for exclusive competition among HBCUs and MIs when

preparing Broad Agency Announcements or other announcements as notices

for programs in which grants or cooperative agreements are to be

awarded to institutions of higher education.

Subpart D--Recipient Qualification Matters--General Policies and

Procedures

Sec. 22.400 Purpose.

The purpose of this subpart is to specify policies and procedures

for grants officers' determination of recipient qualifications prior to

award.

Sec. 22.405 Policy.

(a) General. Grants officers normally shall award grants or

cooperative agreements only to qualified recipients that meet the

standards in Sec. 22.415. This practice conforms with the

Governmentwide policy, stated at 32 CFR 25.115(a), to do business only

with responsible persons.

(b) Exception. In exceptional circumstances, grants officers may

make awards to recipients that do not fully meet the standards in

Sec. 22.415 and include special award conditions that are appropriate

to the particular situation, in accordance with 32 CFR 32.14, 33.12, or

34.4.

Sec. 22.410 Grants officers' responsibilities.

The grants officer is responsible for determining a recipient's

qualification prior to award. The grants officer's signature on the

award document shall signify his or her determination that either:

(a) The potential recipient meets the standards in Sec. 22.415 and

is qualified to receive the grant or cooperative agreement; or

(b) An award is justified to a recipient that does not fully meet

the standards, pursuant to Sec. 22.405(b). In such cases, grants

officers shall document in the award file the rationale for making an

award to a recipient that does not fully meet the standards.

Sec. 22.415 Standards.

To be qualified, a potential recipient must:

(a) Have the management capability and adequate financial and

technical resources, given those that would be made available through

the grant or cooperative agreement, to execute the program of

activities envisioned under the grant or cooperative agreement.

(b) Have a satisfactory record of executing such programs or

activities.

(c) Have a satisfactory record of integrity and business ethics.

[[Page 43877]]

(d) Be otherwise qualified and eligible to receive a grant or

cooperative agreement under applicable laws and regulations (see

Sec. 22.420(c)).

Sec. 22.420 Pre-award procedures.

(a) The appropriate method to be used and amount of effort to be

expended in deciding the qualification of a potential recipient will

vary. In deciding on the method and level of effort, the grants officer

should consider factors such as:

(1) DoD's past experience with the recipient;

(2) Whether the recipient has previously received cost-type

contracts, grants, or cooperative agreements from the Federal

Government; and

(3) The amount of the prospective award and complexity of the

project to be carried out under the award.

(b) There is no DoD-wide requirement to obtain a pre-award credit

report, audit, or any other specific piece of information. On a case-

by-case basis, the grants officer will decide whether there is a need

to obtain any such information to assist in deciding whether the

recipient meets the standards in Sec. 22.415(a), (b), and (c).

(1) Should the grants officer in a particular case decide that a

pre-award credit report, audit, or survey is needed, he or she should

consult first with the appropriate grants administration office

(identified in Sec. 22.710), and decide whether pre-existing surveys or

audits of the recipient, such as those of the recipient's internal

control systems under OMB Circular A-133 \2\ or A-128 \3\ will satisfy

the need (see Sec. 22.715(a)(1)).

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\2\ Contact the Office of Management and Budget, EOP

Publications, 725 17th St. N.W., New Executive Office Building,

Washington, D.C. 20503.

\3\ See footnote 2 to paragraph (b)(1) of this section.

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(2) If, after consulting with the grants administration office, the

grants officer decides to obtain a credit report, audit, or other

information, and the report or other information discloses that a

potential recipient is delinquent on a debt to an agency of the United

States Government, then:

(i) The grants officer shall take such information into account

when determining whether the potential recipient is qualified with

respect to the grant or cooperative agreement; and

(ii) If the grants officer decides to make the award to the

recipient, unless there are compelling reasons to do otherwise, the

grants officer shall delay the award of the grant or cooperative

agreement until payment is made or satisfactory arrangements are made

to repay the debt.

(c) In deciding whether a recipient is otherwise qualified and

eligible in accordance with the standard in Sec. 22.415(d), the grants

officer shall ensure that the potential recipient: --

(1) Is not identified on the Governmentwide ``List of Parties

Excluded from Federal Procurement and Nonprocurement Programs'' as

being debarred, suspended, or otherwise ineligible to receive the

award. The grants officer shall check the list of such parties for: ---

-

(i) Potential recipients of prime awards, as described at 32 CFR

25.505(d); ----

(ii) A recipient's principals (e.g., officers, directors, or other

key employees, as defined at 32 CFR 25.105); and ----

(iii) Potential recipients of subawards, where DoD Component

approval of such principals or lower-tier recipients is required under

the terms of the award (see 32 CFR 25.505(e)). --

(2) Has provided all certifications and assurances required by

Federal statute, Executive order, or codified regulation, unless they

are to be addressed in award terms and conditions at the time of award

(see Sec. 22.510). --

(3) Meets any eligibility criteria that may be specified in the

statute authorizing the specific program under which the award is being

made (see Sec. 22.210(a)(2)). -

(d) Grants officers shall obtain recipients' Taxpayer

Identification Numbers (these may be Social Security Numbers for

individuals and Employer Identification Numbers for businesses or non-

profit entities) to facilitate later collection of delinquent debts, if

necessary.

Subpart E--National Policy Matters

Sec. 22.505 Purpose. -

The purpose of this subpart is to supplement other regulations that

implement national policy requirements, to the extent that it is

necessary to provide additional guidance to DoD grants officers. The

other regulations that implement national policy requirements include:

-

(a) The other parts of the DoDGARs (32 CFR parts 32, 33, and 34)

that implement the Governmentwide guidance in OMB Circulars A-102 \4\

and A-110 \5\ on administrative requirements for grants and cooperative

agreements. Those parts address some national policy matters that

appear in the OMB Circulars.

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\4\ See footnote 2 to Sec. 22.420(b)(1).

\5\ See footnote 2 to Sec. 22.420(b)(1).-

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(b) DoD regulations other than the DoDGARs. -

(c) Other Federal agencies' regulations.

Sec. 22.510 Certifications, representations, and assurances. -

(a) Certifications--(1) Policy. Certifications of compliance with

national policy requirements are to be obtained from recipients only

for those national policies where a statute, Executive order, or

codified regulation specifically states that a certification is

required. Other national policy requirements may be addressed by

obtaining representations or assurances (see paragraph (b) of this

section). Grants officers should utilize methods for obtaining

certifications, in accordance with Executive Order 12866 (3 CFR, 1993

Comp., p. 638), that minimize administration and paperwork.

(2) Procedures. (i) When necessary, grants officers may obtain

individual, written certifications.

(ii) Whenever possible, however, grants officers should identify

the certifications that are required for the particular type of

recipient and program, and consolidate them into a single certification

provision that cites them by reference.

(A) Appendix A to this part lists the common certifications and

cites their applicability. Because some certifications (e.g., the

certification on lobbying in Appendix A to this part) are required by

law to be submitted at the time of proposal, rather than at the time of

award, Appendix A to this part includes suggested language for

incorporating common certifications by reference into a proposal.

(B) If a grants officer elects to have proposers incorporate

certifications by reference into their proposals, the solicitation

either must include the full text of the certifications that proposers

are to provide by reference, or must inform the proposers where the

full text may be found (e.g., in documents or computer network sites

that are readily available to the public) and offer to provide it to

proposers upon request.

(C) Grants officers may incorporate certifications by reference in

award documents when doing so is consistent with statute and codified

regulation. Note that a statute requires submission of the lobbying

certification in Appendix A to this part at the time of proposal.

Grants officers may incorporate the other certifications listed in

Appendix A to this part in award documents, notwithstanding the

regulatory requirement stated in 32 CFR 25.510(a) for obtaining

certifications regarding debarment and suspension at the time of

proposal submission. The provision that a grants officer would use to

incorporate certifications in award documents would be similar to the

[[Page 43878]]

suggested provision in Appendix A to this part, except that it would be

modified to state that the recipient is providing the required

certifications by signing the award document or by accepting funds

under the award.

(b) Representations and assurances. Many national policies, either

in statute or in regulation, require recipients of grants and

cooperative agreements to make representations or provide assurances

(rather than certifications) that they are in compliance with the

policies. As discussed in Sec. 22.610(b), Appendix B to this part

suggests award terms and conditions that may be used to address several

of the more commonly applicable national policy requirements. These

terms and conditions may be used to obtain required assurances and

representations, if the grants officer wishes to do so at the time of

award, rather than through the use of the standard application form

(SF-424) or other means at the time of proposal.

Sec. 22.515 Provisions of annual appropriations acts. -

An annual appropriations act can include general provisions stating

national policy requirements that apply to the use of funds (e.g.,

obligation through a grant or cooperative agreement) appropriated by

the act. Because these requirements are of limited duration (the period

during which a given year's appropriations are available for

obligation), and because they can vary from year to year and from one

agency's appropriations act to another agency's, the grants officer

must know the agency(ies) and fiscal year(s) of the appropriations

being obligated by a given grant or cooperative agreement, and may need

to consult legal counsel if he or she does not know the requirements

applicable to those appropriations.

Sec. 22.520 Military recruiting on campus. [Reserved]

Sec. 22.525 Paperwork Reduction Act. -

Grants officers shall include appropriate award terms or

conditions, if a recipient's activities under an award will be subject

to the Paperwork Reduction Act of 1995 (44 U.S.C. 3500, et seq.):-

(a) Generally, the Act only applies to Federal agencies--it

requires agencies to obtain clearance from the Office of Management and

Budget before collecting information using forms, schedules,

questionnaires, or other methods calling either for answers to: ---

(1) Identical questions from ten or more persons other than

agencies, instrumentalities, or employees of the United States. ---

(2) Questions from agencies, instrumentalities, or employees of the

United States which are to be used for statistical compilations of

general public interest. --

(b) The Act applies to similar collections of information by

recipients of grants or cooperative agreements only when: ---

(1) A recipient collects information at the specific request of the

awarding Federal agency; or ---

(2) The terms and conditions of the award require specific approval

by the agency of the information collection or the collection

procedures.

Sec. 22.530 Metric system of measurement. --

(a) Statutory requirement. The Metric Conversion Act of 1975, as

amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C.

205) and implemented by Executive Order 12770 (3 CFR, 1991 Comp., p.

343), states that: ---

(1) The metric system is the preferred measurement system for U.S.

trade and commerce. ---

(2) The metric system of measurement will be used, to the extent

economically feasible, in federal agencies' procurements, grants, and

other business-related activities. ---

(3) Metric implementation shall not be required to the extent that

such use is likely to cause significant inefficiencies or loss of

markets to United States firms. --

(b) Responsibilities. DoD Components shall ensure that the metric

system is used, to the maximum extent practicable, in measurement-

sensitive activities supported by programs that use grants and

cooperative agreements, and in measurement-sensitive outputs of such

programs.

Subpart F--Award

Sec. 22.600 Purpose. --

This subpart sets forth grants officers' responsibilities relating

to the award document and other actions at the time of award.

Sec. 22.605 Grants officers' responsibilities. --

At the time of award, the grants officer is responsible for

ensuring that: --

(a) The award instrument contains the appropriate terms and

conditions, in accordance with Sec. 22.610. --

(b) Information about the award is provided to the office

responsible for preparing reports for the Defense Assistance Award Data

System (DAADS), to ensure timely and accurate reporting of data

required by 31 U.S.C. 6101-6106 (see 32 CFR part 21, subpart C). --

(c) In addition to the copy of the award document provided to the

recipient, a copy is forwarded to the office designated to administer

the grant or cooperative agreement, and another copy is forwarded to

the finance and accounting office designated to make the payments to

the recipient.

Sec. 22.610 Award instruments. --

(a) Each award document shall include terms and conditions that: --

-

(1) Address programmatic requirements (e.g., a statement of work or

other appropriate terms or conditions that describe the specific goals

and objectives of the project). The grants officer shall develop such

terms and conditions in coordination with program officials. ---

(2) Provide for the recipient's compliance with: -----

(i) Pertinent Federal statutes or Executive orders that apply

broadly to Federal or DoD assistance awards. -----

(ii) Any program-specific requirements that are prescribed in the

program statute (see Sec. 22.210(a)(2)), or appropriation-specific

requirements that are stated in the pertinent Congressional

appropriations (see Sec. 22.515). -----

(iii) Pertinent portions of the DoDGARs or other Federal

regulations, including those that implement the Federal statutes or

Executive orders described in paragraphs (a)(2) (i) and (ii) of this

section. ---

(3) Specify the grants officer's instructions for post-award

administration, for any matter where the post-award administration

provisions in 32 CFR part 32, 33, or 34 give the grants officer options

for handling the matter. For example, under 32 CFR 32.24(b), the grants

officers must choose among possible methods for the recipient's

disposition of program income. It is essential that the grants officer

identify the option selected in each case, to provide clear

instructions to the recipient and the grants officer responsible for

post-award administration of the grant or cooperative agreement. --

(b) To assist grants officers: ---

(1) Appendix B to this part provides model clauses to implement

certain Federal statutes, Executive orders, and regulations (see

paragraph (a)(2)(i) of this section) that frequently apply to DoD

grants and cooperative agreements. Grants officers may incorporate the

model clauses into award terms and conditions, as appropriate. It

should be noted that Appendix B to this part is an aid, and not an

exhaustive list of all requirements that apply in all cases.

[[Page 43879]]

Depending on the circumstances of a given award, other statutes,

Executive orders, or codified regulations also may apply (e.g.,

Appendix B to this part does not list program-specific requirements

described in paragraph (a)(2)(ii) of this section).

(2) Appendix C to this part is a list of administrative

requirements that apply to awards to different types of recipients. It

also identifies post-award administration issues that the grants

officer must address in the award terms and conditions.

Subpart G--Field Administration

Sec. 22.700 Purpose. ---

This subpart prescribes policies and procedures for administering

grants and cooperative agreements. It does so in conjunction with 32

CFR parts 32, 33, and 34, which prescribe administrative requirements

for particular types of recipients.

Sec. 22.705 Policy. ---

(a) DoD policy is to have each recipient deal with a single office,

to the maximum extent practicable, for post-award administration of its

grants and agreements. This reduces burdens on recipients that can

result when multiple DoD offices separately administer grants and

agreements they award to a given recipient. It also minimizes

unnecessary duplication of field administration services. ---

(b) To further reduce burdens on recipients, the office responsible

for performing field administration services for grants and agreements

to a particular recipient shall be the same office that is assigned

responsibility for performing field administration services for

contracts awarded to that recipient. --

(c) Contracting activities and grants officers therefore shall use

cross-servicing arrangements whenever practicable and, to the maximum

extent possible, delegate responsibility for post-award administration

to the cognizant grants administration offices identified in

Sec. 22.710.

Sec. 22.710 Assignment of grants administration offices.

In accordance with the policy stated in Sec. 22.705(b), the DoD

offices (referred to in this part as ``grants administration offices'')

that are assigned responsibility for performing field administration

services for grants and agreements are (see the ``DoD Directory of

Contract Administration Services Components,'' DLAH 4105.4,\6\ for

specific addresses of administration offices): -

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\6\ Copies may be obtained from the Defense Logistics Agency,

Publications Distribution Division (DASC-WDM), 8725 John J. Kingman

Rd., Suite 0119, Fort Belvoir, VA 22060-6220.

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(a) Regional offices of the Office of Naval Research, for grants

and agreements with: ----

(1) Institutions of higher education and laboratories affiliated

with such institutions, to the extent that such organizations are

subject to the university cost principles in OMB Circular A-21.\7\

---------------------------------------------------------------------------

\7\ See footnote 2 to Sec. 22.420(b)(1).

---------------------------------------------------------------------------

(2) Nonprofit organizations that are subject to the cost principles

in OMB Circular A-122,\8\ if their principal business with the

Department of Defense is research and development.

---------------------------------------------------------------------------

\8\ See footnote 2 to Sec. 22.420(b)(1). -

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(b) Field offices of the Defense Contract Management Command, for

grants and agreements with all other entities, including: --

(1) Commercial organizations. --

(2) Nonprofit organizations identified in Attachment C of OMB

Circular A-122 that are subject to commercial cost principles in 48 CFR

part 31. --

(3) Nonprofit organizations subject to the cost principles in OMB

Circular A-122, if their principal business with the Department of

Defense is other than research and development.

(4) State and local governments.

Sec. 22.715 Grants administration office functions.

The primary responsibility of cognizant grants administration

offices shall be to advise and assist grants officers and recipients

prior to and after award, and to help ensure that recipients fulfill

all requirements in law, regulation, and award terms and conditions.

Specific functions include:

(a) Conducting reviews and coordinating reviews, audits, and audit

requests. This includes:

(1) Advising grants officers on the extent to which audits by

independent auditors (i.e., public accountants or Federal auditors)

have provided the information needed to carry out their

responsibilities. If a recipient has had an independent audit in

accordance with OMB Circular A-128 or OMB Circular A-133, and the audit

report disclosed no material weaknesses in the recipient's financial

management and other management and control systems, additional

preaward or closeout audits usually will not be needed (see

Secs. 22.420(b) and 22.825(b)).

(2) Performing pre-award surveys, when requested by a grants

officer, after providing advice described in paragraph (a)(1) of this

section.

(3) Reviewing recipients' systems and compliance with Federal

requirements, in coordination with any reviews and compliance audits

performed by independent auditors under OMB Circular A-128 or A-133.

This includes:

(i) Reviewing recipients' financial management, property

management, and purchasing systems, to determine the adequacy of such

systems.

(ii) Determining that recipients have drug-free workplace programs,

as required under 32 CFR part 25.

(4) Notifying the Office of the Assistant Inspector General for

Audit Policy and Oversight (OAIG(APO)), 400 Army-Navy Drive, Arlington,

VA 22202, if either of the following is not available within a

reasonable period of time (e.g., six months) after the date on which a

recipient of DoD grants and agreements was to have submitted its audit

report under OMB Circular A-128 or A-133 to the OAIG(APO):

(i) The recipient's audit report under OMB Circular A-128 or A-133.

(ii) The OAIG(APO)'s desk review of the recipient's audit report,

or a letter stating that the OAIG(APO) has decided not to conduct a

desk review.

(b) Performing property administration services for Government-

owned property, and for any property acquired by a recipient, with

respect to which the recipient has further obligations to the

Government.

(c) Ensuring timely submission of required reports.

(d) Executing administrative closeout procedures.

(e) Establishing recipients' indirect cost rates, where the

Department of Defense is the cognizant or oversight Federal agency with

the responsibility for doing so.

(f) Performing other administration functions (e.g., receiving

recipients' payment requests and transmitting approved payment

authorizations to payment offices) as delegated by applicable cross-

servicing agreements or letters of delegation.

Subpart H--Post-Award Administration

Sec. 22.800 Purpose and relation to other parts.

This subpart sets forth grants officers' and DoD Components'

responsibilities for post-award administration, by providing DoD-

specific requirements on payments; debt collection; claims, disputes

and appeals; and closeout audits.

Sec. 22.805 Post-award requirements in other parts.

Grants officers responsible for post-award administration of grants

and cooperative agreements shall administer such awards in accordance

with the

[[Page 43880]]

following parts of the DoDGARs, as supplemented by this subpart:

(a) Awards to domestic recipients. Standard administrative

requirements for grants and cooperative agreements with domestic

recipients are specified in other parts of the DoDGARs, as follows:

(1) For awards to domestic institutions of higher education and

other nonprofit organizations, requirements are specified in 32 CFR

part 32, which is the DoD implementation of OMB Circular A-110.

(2) For awards to State and local governments, specifies

requirements are specified in 32 CFR part 33, which is the DoD

codification of the Governmentwide common rule to implement OMB

Circular A-102.

(3) For awards to domestic commercial organizations, requirements

are specified in 32 CFR part 34, which is modeled on the requirements

in OMB Circular A-110.

(b) Awards to foreign recipients. DoD Components shall use the

administrative requirements specified in paragraph (a) of this section,

to the maximum extent practicable, for grants and cooperative

agreements to foreign recipients.

Sec. 22.810 Payments.

(a) Purpose. This section prescribes policies and grants officers'

post-award responsibilities, with respect to payments to recipients of

grants and cooperative agreements.

(b) Policy. It is Governmentwide policy to minimize the time

elapsing between any payment of funds to a recipient and the

recipient's disbursement of the funds for program purposes (see 32 CFR

32.22(a) and 33.21(b), and the implementation of the Cash Management

Improvement Act at 31 CFR part 205). Expanding on the Governmentwide

policy, DoD policy is to:

(1) Use electronic commerce, to the maximum extent practicable, in

the payment process for grants and cooperative agreements, to improve

timeliness and accuracy of payments.

(2) Make authorized payments expeditiously.

(i) When grants or agreements provide for payments, either advances

or reimbursements, to be made in response to recipients' requests,

authorized payments shall be made as soon as possible after receipt of

the requests. Authorized payments normally shall not be made more than:

(A) Seven days after receipt of recipients' requests, whenever

grants officers, payment offices, and recipients are able to use

electronic commerce (i.e., electronic data interchange (EDI) to request

and authorize payments and electronic funds transfer (EFT) to make

payments).

(B) Thirty days after receipt of recipients' requests, when it is

not possible to use electronic commerce and offices must process paper

to receive recipients' requests, or to authorize and make payments

(note, however, that Governmentwide guidance implemented at 32 CFR

32.22(e)(1) makes payment within 30 days a firm requirement, not just

the norm, for payments to institutions of higher education and other

nonprofit organizations, when the reimbursement method of payment is

used). Payments shall be made as expeditiously as processing of paper

transactions allows--this policy is intended neither to delay payments

nor to make them as close as possible to the 30th day.

(ii) When payments are authorized in advance, based on a

predetermined schedule, the payment office should make each payment

within 7 days of the date specified, if the schedule was provided to

the payment office at least 30 days in advance of the date of the

scheduled payment.

(c) Post-award responsibilities. The administrative grants officer

designated to handle payments for a grant or cooperative agreement is

responsible for:

(1) Maintaining a close working relationship with the personnel in

the finance and accounting office responsible for making the payments.

A good working relationship is necessary, to ensure timely and accurate

handling of financial transactions for grants and agreements.

Administrative grants officers should be generally familiar with

policies and procedures for disbursing officers that are contained in

Chapter 19 of Volume 10 of the DoD Financial Management Regulation (DoD

7000.14-R \9\).

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\9\ Copies may be obtained, at cost, from the National Technical

Information Service, 5285 Port Royal Road, Springfield, VA 22161.

Authorized users may also obtain copies from the Defense Technical

Information Center, 8725 John J. Kingman Rd., Suite 0944, Fort

Belvoir, VA 22060-6218.

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(2) Handling recipients' requests for payments in accordance with

DoD implementation of Governmentwide guidance (see 32 CFR 32.22, 33.21,

or 34.12, as applicable).

(3) Reviewing each payment request to ensure that:

(i) The request complies with the award terms.

(ii) Available funds are adequate to pay the request.

(iii) The recipient will not have excess cash on hand, based on

expenditure patterns.

(4) Forwarding authorizations to the designated payment office

expeditiously, so that payments may be made in accordance with the

timely payment goals in paragraph (b)(2) of this section.

Authorizations generally should be forwarded to the payment office at

least 3 working days before the end of the period specified in

paragraph (b)(2)(i) (A) or (B) of this section.

Sec. 22.815 Claims, disputes, and appeals.

(a) Award terms. Grants officers shall include in grants and

cooperative agreements a term or condition that incorporates the

procedures of this section for:

(1) Processing recipient claims and disputes.

(2) Deciding appeals of grants officers' decisions.

(b) Submission of claims--(1) Recipient claims. Recipients shall

submit claims arising out of or relating to a grant or cooperative

agreement to the grants officer for decision. Claims shall be in

writing, shall specify the nature and basis for the relief requested,

and shall include all data that supports the claim.

(2) DoD Component claims. Claims by a DoD Component shall be the

subject of a written decision by a grants officer.

(c) Alternative Dispute Resolution (ADR)--(1) Policy. DoD policy is

to try to resolve all issues concerning grants and cooperative

agreements by mutual agreement at the grants officer's level. DoD

Components therefore are encouraged to use ADR procedures to the

maximum extent practicable. ADR procedures are any voluntary means

(e.g., mini-trials or mediation) used to resolve issues in controversy

without resorting to formal administrative appeals (see paragraph (e)

of this section) or to litigation.

(2) Procedures. (i) The ADR procedures or techniques to be used may

either be agreed upon by the Government and the recipient in advance

(e.g., when agreeing on the terms and conditions of the grant or

cooperative agreement), or may be agreed upon at the time the parties

determine to use ADR procedures.

(ii) If a grants officer and a recipient are not able to resolve an

issue through unassisted negotiations, the grants officer shall

encourage the recipient to enter into ADR procedures. ADR procedures

may be used prior to submission of a recipient's claim or at any time

prior to the Grant Appeal Authority's decision on a recipient's

[[Page 43881]]

appeal (see paragraph (e)(3)(iii) of this section).

(d) Grants officer decisions. (1) Within 60 days of receipt of a

written claim, the grants officer shall either:

(i) Prepare a written decision, which shall include the reasons for

the decision; shall identify all relevant data on which the decision is

based; shall identify the cognizant Grant Appeal Authority and give his

or her mailing address; and shall be included in the award file; or

(ii) Notify the recipient of a specific date when he or she will

render a written decision, if more time is required to do so. The

notice shall inform the recipient of the reason for delaying the

decision (e.g., the complexity of the claim, a need for more time to

complete ADR procedures, or a need for the recipient to provide

additional information to support the claim).

(2) The decision of the grants officer shall be final. If a

recipient decides to appeal a grants officer's decision, the grants

officer shall encourage the recipient to enter into ADR procedures, as

described in paragraph (c) of this section.

(e) Formal administrative appeals--(1) Grant Appeal Authorities.

Each DoD Component that awards grants or cooperative agreements shall

establish one or more Grant Appeal Authorities to decide formal,

administrative appeals in accordance with paragraph (e)(3) of this

section. Each Grant Appeal Authority shall be either:

(i) An individual at a grade level in the Senior Executive Service,

if civilian, or at the rank of Flag or General Officer, if military; or

(ii) A board chaired by such an individual.

(2) Right of appeal. A recipient has the right to appeal a grants

officer's decision to the Grant Appeal Authority (but note that ADR

procedures, as described in paragraph (c) of this section, are the

preferred means for resolving any appeal).

(3) Appeal procedures--(i) Notice of appeal. A recipient may appeal

a decision of the grants officer within 90 days of receiving that

decision, by filing a written notice of appeal to the Grant Appeal

Authority and to the grants officer. If a recipient elects to use an

ADR procedure, the recipient is permitted an additional 60 days to file

the written notice of appeal to the Grant Appeal Authority and grants

officer.

(ii) Appeal file. Within 30 days of receiving the notice of appeal,

the grants officer shall forward to the Grant Appeal Authority and the

recipient the appeal file, which shall include copies of all documents

relevant to the appeal. The recipient may supplement the file with

additional documents it deems relevant. Either the grants officer or

the recipient may supplement the file with a memorandum in support of

its position. The Grant Appeal Authority may request additional

information from either the grants officer or the recipient.

(iii) Decision. The appeal shall be decided solely on the basis of

the written record, unless the Grant Appeal Authority decides to

conduct fact-finding procedures or an oral hearing on the appeal. Any

fact-finding or hearing shall be conducted using procedures that the

Grant Appeal Authority deems appropriate.

(f) Representation. A recipient may be represented by counsel or

any other designated representative in any claim, appeal, or ADR

proceeding brought pursuant to this section, as long as the

representative is not otherwise prohibited by law or regulation from

appearing before the DoD Component concerned.

(g) Non-exclusivity of remedies. Nothing in this section is

intended to limit a recipient's right to any remedy under the law.

Sec. 22.820 Debt collection.

(a) Purpose. This section prescribes procedures for establishing

debts owed by recipients of grants and cooperative agreements, and

transferring them to payment offices for collection.

(b) Resolution of indebtedness. The grants officer shall attempt to

resolve by mutual agreement any claim of a recipient's indebtedness to

the United States arising out of a grant or cooperative agreement

(e.g., by a finding that a recipient was paid funds in excess of the

amount to which the recipient was entitled under the terms and

conditions of the award).

(c) Grants officer's decision. In the absence of such mutual

agreement, any claim of a recipient's indebtedness shall be the subject

of a grants officer decision, in accordance with Sec. 22.815(b)(2). The

grants officer shall prepare and transmit to the recipient a written

notice that:

(1) Describes the debt, including the amount, the name and address

of the official who determined the debt (e.g., the grants officer under

Sec. 22.815(d), and a copy of that determination.

(2) Informs the recipient that:

(i) Within 30 days of the grants officer's decision, the recipient

shall either pay the amount owed or inform the grants officer of the

recipient's intention to appeal the decision.

(ii) If the recipient elects not to appeal, any amounts not paid

within 30 days of the grants officer's decision will be a delinquent

debt.

(iii) If the recipient elects to appeal the grants officer's

decision the recipient has 90 days, or 150 days if ADR procedures are

used, after receipt of the grants officer's decision to file the

appeal, in accordance with Sec. 22.815(e)(3)(i).

(iv) The debt will bear interest, and may include penalties and

other administrative costs. No interest will be charged if the

recipient pays the amount owed within 30 days of the grants officer's

decision. Interest will be charged for the entire period from the date

the decision was mailed, if the recipient pays the amount owed after 30

days.

(d) Follow-up. Depending upon the response from the recipient, the

grants officer shall proceed as follows:

(1) If the recipient pays the amount owed within 30 days to the

grants officer, the grants officer shall forward the payment to the

responsible payment office.

(2) If within 30 days the recipient has neither paid the amount due

nor provided notice of intent to file an appeal of the grants officer's

decision, the grants officer shall send a demand letter to the

recipient, with a copy to the payment office that will be responsible

for collecting the delinquent debt. The payment office will be

responsible for any further debt collection activity, including

issuance of additional demand letters (see Chapter 19 of volume 10 of

the DoD Financial Management Regulation, DoD 7000.14-R. The grants

officer's demand letter shall:

(i) Describe the debt, including the amount, the name and address

of the official that determined the debt (e.g., the grants officer

under Sec. 22.815(d)), and a copy of that determination.

(ii) Notify the recipient that the debt is a delinquent debt that

bears interest from the date of the grants officer's decision, and that

penalties and other administrative costs may be assessed.

(iii) Identify the payment office that is responsible for the

collection of the debt, and notify the recipient that it may submit a

proposal to that payment office to defer collection, if immediate

payment is not practicable.

(3) If the recipient elects to appeal the grants officer's

decision, further action to collect the debt is deferred, pending the

outcome of the appeal. If the final result of the appeal is a

determination that the recipient owes a debt to the Federal Government,

the grants officer shall send a demand letter to the recipient and

transfer responsibility for further debt collection to a payment

[[Page 43882]]

office, as described in paragraph (d)(2) of this section.

(e) Administrative offset. In carrying out the responsibility for

collecting delinquent debts, a disbursing officer may need to consult

grants officers, to determine whether administrative offset against

payments to a recipient owing a delinquent debt would interfere with

execution of projects being carried out under grants or cooperative

agreements. Disbursing officers may also ask grants officers whether it

is feasible to convert payment methods under grants or agreements from

advance payments to reimbursements, to facilitate use of administrative

offset. Grants officers therefore should be familiar with guidelines

for disbursing officers, in Chapter 19 of Volume 10 of the Financial

Management Regulation (DoD 7000.14-R), concerning withholding and

administrative offset to recover delinquent debts.

Sec. 22.825 Closeout audits.

(a) Purpose. This section establishes DoD policy for obtaining

audits at closeout of individual grants and cooperative agreements. It

thereby supplements the closeout procedures specified in:

(1) 32 CFR 32.71 and 32.72, for awards to institutions of higher

education and other nonprofit organizations.

(2) 32 CFR 33.50 and 33.51, for awards to State and local

governments.

(3) 32 CFR 34.61 and 34.62, for awards to commercial entities.

(b) Policy. Grants officers shall use their judgment on a case-by-

case basis, in deciding whether to obtain an audit prior to closing out

a grant or cooperative agreement (i.e., there is no specific DoD

requirement to obtain an audit prior to doing so). Factors to be

considered include:

(1) The amount of the award.

(2) DoD's past experience with the recipient, including the

presence or lack of findings of material deficiencies in recent:

(i) Audits of individual awards; or

(ii) Systems-wide financial audits and audits of the compliance of

the recipient's systems with Federal requirements, under OMB Circular

A-128 or A-133, where those Circulars are applicable. (See

Sec. 22.715(a)(1)).

Appendix A to Part 22.--Suggested Proposal Provision for Required Certifications

----------------------------------------------------------------------------------------------------------------

Used for

Suggested provision in proposal ---------------------------------------------------------

(or, suitably modified, in Specific Source of requirement

award) Type of award Type of recipient situation

----------------------------------------------------------------------------------------------------------------

By signing and submitting this

proposal, the recipient is

providing the:

(1) Certification at Any All but foreign Any.............. Subparts A through E

Appendix A to 32 CFR Part nonprocurement governments, of 32 CFR 25, which

25 regarding debarment, transaction [see foreign implement E.O. 12549

suspension, and other ``primary governmental [3 CFR, 1986 Comp.,

responsibility matters. covered entities, and p. 189]; E.O. 12689

transaction,'' others excluded [3 CFR, 1989 Comp.,

defined at 32 from ``person,'' p. 235]; and Sec.

CFR as defined at 32 2455 of Federal

25.110(a)(1)(i)]. CFR 25.105. Acquisition and

Streamlining Act of

1994 (Pub. L. 103-

355).

(2) Certification at Any financial Any.............. Any, except where Subpart F of 32 CFR

Appendix C to 32 CFR Part assistance, inconsistent 25, which implements

25 regarding drug-free including any with sec. 5151-5160 of the

workplace requirements. grant or international Drug-Free Workplace

cooperative obligations of Act of 1988 (Pub. L.

agreement [see the U.S. or the 100-690, Title V,

``grant,'' as laws or Subtitle D; 41 U.S.C.

broadly defined regulations of a 701, et seq.).

at 32 CFR foreign

25.605(b)(7)]. government [see

32 CFR

25.610(b)].

(3) Certification at Any financial All but Indian Any.............. 32 CFR 28, which

Appendix A to 32 CFR Part assistance [see tribe or tribal implements 31 U.S.C.

28 regarding lobbying. 32 CFR 28.105(b) organization 1352.

and definitions with respect to

of ``Federal expenditures

grant,'' specifically

``Federal permitted by

cooperative other Federal

agreement,'' and law [see 32 CFR

``Federal loan'' 28.105(l)].

in 32 CFR 28.105

(c), (d), and

(e)].

----------------------------------------------------------------------------------------------------------------

Appendix B to Part 22.--Suggested Award Provisions for National Policy Requirements That Often Apply

----------------------------------------------------------------------------------------------------------------

Used for

--------------------------------------------------------- Some requirement(s)

Suggested award provision Specific the grants officer

Type of award Type of recipient situation should note

----------------------------------------------------------------------------------------------------------------

Nondiscrimination

By signing this agreement or

accepting funds under this

agreement, the recipient

assures that it will comply

with applicable provisions of

the following national

policies prohibiting

discrimination:

[[Page 43883]]

a. On the basis of race, Grants, Any.............. Any.............. 32 CFR part 195.6

color, or national origin, cooperative requires grants

in Title VI of the Civil agreements, and officer to obtain

Rights Act of 1964 (42 other financial recipient's assurance

U.S.C. 2000d, et seq.), as assistance of compliance. It

implemented by DoD included at 32 also requires

regulations at 32 CFR part CFR 195.2(d). recipient to flow

195. down requirements to

subrecipients.

b. On the basis of race, Grants, Any.............. Awards under Recipients must

color, religion, sex, or cooperative which include clause

national origin, in agreements, and construction prescribed by 41 CFR

Executive Order 11246 [3 other prime work is to be 60-1.4(b) in

CFR, 1964-1965 Comp., p. awards included done. federally assisted

339], as implemented by by ``Federally construction awards

Department of Labor assisted and subawards [41 CFR

regulations at 41 CFR part construction 60-1.4(d) allows

60. contract'' incorporation by

definition at 40 reference]. This

CFR 60-1.3. requirement also is

at 32 CFR 33.36(l)(3)

and at paragraphs 1.

of Appendices A to 32

CFR part 32 and 32

CFR part 34.

c. On the basis of sex or Grants, Educational Any educational ......................

blindness, in Title IX of cooperative institution [for program or

the Education Amendments agreements, and sex activity

of 1972 (20 U.S.C. 1681, other financial discrimination, receiving

et seq.). assistance excepts any Federal

included at 16 institution financial

U.S.C. 1682. controlled by assistance.

religious

organization,

when

inconsistent

with the

organization's

religious

tenets].

d. On the basis of age, in Grants, Any.............. Any.............. 45 CFR 90.4 requires

the Age Discrimination Act cooperative that recipient flow

of 1975 (42 U.S.C. 6101, agreements, and down requirements to

et seq.), as implemented other awards subrecipients

by Department of Health included in [definition of

and Human Services ``Federal ``recipient'' at 45

regulations at 45 CFR part financial CFR 90.4 includes

90. assistance'' entities to which

definition at 45 assistance is

CFR 90.4. extended indirectly,

through another

recipient].

e. On the basis of

handicap, in:

1. Section 504 of the Grants, Any.............. Any.............. 32 CFR 56.9(b)

Rehabilitation Act of cooperative requires grants

1973 (29 U.S.C. 794), agreements, and officer to obtain

as implemented by other awards recipient's written

Department of Justice included in assurance of

regulations at 28 CFR ``Federal compliance and

part 41 and DoD financial specifies what the

regulations at 32 CFR assistance'' assurance includes.

part 56. definition at 32 Note that

CFR 56.3(b). requirements flow

down to subawards

[``recipient,''

defined at 32 CFR

56.3(g), includes

entities receiving

assistance indirectly

through other

recipients].

2. The Architectural Grant or loan.... Any.............. Construction or ......................

Barriers Act of 1968 alteration of

(42 U.S.C. 4151, et buildings or

seq.). facilities which

will require

public

accessibility.

Officials Not to Benefit

No member of or delegate to Grants, Any.............. Any. ......................

Congress, or resident cooperative

commissioner, shall be agreements, and

admitted to any share or part other

of this agreement, or to any ``agreements''.

benefit arising from it, in

accordance with 41 U.S.C. 22.

Live Organisms

By signing this agreement or

accepting funds under this

agreement, the recipient

assures that it will comply

with applicable provisions of

the following national

policies concerning live

organisms:

[[Page 43884]]

a. For human subjects, the Any.............. Any.............. Research, 32 CFR 219.103

Common Federal Policy for development, requires each

the Protection of Human test, or recipient to have a

Subjects, codified by the evaluation Federally approved,

Department of Health and involving live, written assurance of

Human Services at 45 CFR human subjects, compliance [it may be

part 46 and implemented by with some HHS-approved, on file

the Department of Defense exceptions [see with HHS; DoD-

at 32 CFR part 219. 32 CFR part 219]. approved, on file

with a DoD Component;

or may need to be

obtained by the

grants officer for

the specific award].

b. For animals:

1. Rules concerning Any.............. Any.............. Research, Prior to making an

animal acquisition, experimentation, award under which

transport, care, or testing animal-based

handling, and use in: involving the research, testing, or

(i) 9 CFR parts 1-4, use of animals. training is to be

Department of performed, DoD

Agriculture Directive 3216.1 \1\

regulations that requires

implement the administrative review

Laboratory Animal of the proposal by a

Welfare Act of 1966 (7 DoD veterinarian

U.S.C. 2131-2156); and trained or

(ii) the ``Guide for experienced in

the Care and Use of laboratory animal

Laboratory Animals,'' science and medicine,

National Institutes of as well as a review

Health Publication No. by the recipient's

86-23. Institutional Animal

Care and Use

Committee.

2. Prohibitions on the Any.............. Any.............. Use of DoD ......................

purchase or use of appropriations

dogs or cats for for training on

certain medical treatment of

training purposes, in wounds.

Section 8019 (10

U.S.C. 2241 note) of

the Department of

Defense Appropriations

Act, 1991 (Pub. Law

101-511).

3. Regulations of the Any.............. Any.............. Activities which ......................

Departments of the may involve or

Interior (50 CFR parts impact wildlife

10-24) and Commerce and plants.

(50 CFR parts 217-227)

that implement

statutes and

conventions on the

taking, possession,

transport, sale,

purchase, export, or

import of wildlife and

plants, including the:

Endangered Species Act

of 1973 (16 U.S.C.

1531-1543); Marine

Mammal Protection Act

(16 U.S.C. 1361-1384);

Lacey Act (18 U.S.C.

42); and Convention on

International Trade in

Endangered Species of

Wild Fauna and Flora.

Military Recruiters

[Grants Officers shall include Grants and Domestic Any. ......................

the exact award provision cooperative institution of

specified at 32 CFR part 23.]. agreements. higher education

(see 32 CFR part

23).

[[Page 43885]]

Cargo Preference

The recipient agrees that it Grants, Any.............. Any award where 46 CFR 381.7 requires

will comply with the Cargo cooperative possibility grants officers to

Preference Act of 1954 (46 agreements, and exists for ocean include appropriate

U.S.C. 1241), as implemented other awards transport of clauses in award

by Department of included in 46 items procured documents. It also

Transportation regulations at CFR 381.7. or obtained by requires recipients

46 CFR 381.7, which require or on behalf of to include

that at least 50 percent of the recipient, appropriate clauses

equipment, materials or or any of the in contracts using

commodities procured or recipient's U.S. Government funds

otherwise obtained with U.S. contractors or under agreements,

Government funds under this subcontractors. where ocean transport

agreement, and which may be of procured goods is

transported by ocean vessel, possible [e.g., see

shall be transported on clause at 46 CFR

privately owned U.S.-flag 381.7(b)].

commercial vessels, if

available.

Preference for U.S.-Flag

Carriers

Travel supported by U.S. Any.............. Any.............. Any agreement ......................

Government funds under this under which

agreement shall use U.S.-flag international

air carriers (air carriers air travel may

holding certificates under 49 be supported by

U.S.C. 41102) for U.S. Government

international air funds.

transportation of people and

property to the extent that

such service is available, in

accordance with the

International Air

Transportation Fair

Competitive Practices Act of

1974 (49 U.S.C. 40118) and the

interpretative guidelines

issued by the Comptroller

General of the United States

in the March 31, 1981,

amendment to Comptroller

General Decision B138942.

Relocation and Real Property

Acquisition

The recipient assures that it Grants, ``State agency'' Any project that 42 U.S.C. 4630 and 49

will comply with 49 CFR part cooperative as defined in 49 may result in CFR 24.4, as

24, which implements the agreements, and CFR part 24 to real property implemented by DoD at

Uniform Relocation Assistance other ``Federal include persons acquisition or 32 CFR part 259,

and Real Property Acquisition financial with authority displacement requires grants

Policies Act of 1970 (42 assistance'' to acquire where State officers to obtain

U.S.C. 4601, et seq.) and [see 49 CFR property by agency hasn't recipients' assurance

provides for fair and 24.2(j)]. eminent domain opted to certify of compliance.

equitable treatment of persons under State law. to Dept. of

displaced by Federally Transportation

assisted programs or persons in lieu of

whose property is acquired as providing

a result of such programs. assurance.

Hatch Act

The recipient agrees to comply Grants or loans.. State and local All but employees ......................

with the Hatch Act (5 U.S.C. governments. of educational

1501-1508 and 7324-7328), as or research

implemented by the Office of institutions

Personnel Management at 5 CFR supported by

part 151, which limits State; political

political activity of subdivision

employees or officers of State thereof; or

or local governments whose religious,

employment is connected to an philanthropic,

activity financed in whole or or cultural

part with Federal funds. organization.

Environmental Standards

By signing this agreement or

accepting funds under this

agreement, the recipient

assures that it will:

[[Page 43886]]

a. Comply with applicable Grants, Any.............. Any, for Clean 40 CFR 15.31 requires

provisions of the Clean cooperative Air Act, Clean the assurances in the

Air Act (42 U.S.C. 7401, agreements, and Water Act, and suggested award

et seq.) and Clean Water other awards Executive Order provision. It also

Act (33 U.S.C. 1251, et included in 11738. requires that

seq.), as implemented by definitions of 40 CFR 15.5 makes recipients flow down

Executive Order 11738 [3 ``grant'' and awards of less requirements to

CFR, 1971-1975 Comp., p. ``loan'' in 40 than $100,000, subawards (``grant''

799] and Environmental CFR part 15. and certain as defined at 40 CFR

Protection Agency (EPA) other awards, 15.4 includes

regulations at 40 CFR part exempt from the subagreements).

15. In accordance with the EPA regulations. Executive Order 11738

EPA regulations, the establishes

recipient further agrees additional

that it will: responsibilities for

grants officers.

Not use any facility on

the EPA's List of

Violating Facilities

in performing any

award that is

nonexempt under 40 CFR

15.5, as long as the

facility remains on

the list

Notify the awarding

agency if it intends

to use a facility in

performing this award

that is on the List of

Violating Facilities

or that the recipient

knows has been

recommended to be

placed on the List of

Violating Facilities

b. Identify to the awarding

agency any impact this

award may have on:

1. The quality of the Any.............. Any.............. Any actions that The Council on

human environment, and may affect the Environmental

provide help the environment. Quality's regulations

agency may need to for implementing NEPA

comply with the are at 40 CFR parts

National Environmental 1500-1508. Executive

Policy Act (NEPA, at Order 11514 [3 CFR,

42 U.S.C. 4321, et 1966-1970 Comp., p.

seq.) and to prepare 902], as amended by

Environmental Impact Executive Order

Statements or other 11991, sets policies

required environmental and procedures for

documentation. The considering actions

recipient agrees, in in the U.S. Executive

such cases, to take no Orders 11988 [3 CFR,

action that will have 1977 Comp., p. 117]

an adverse and 11990 [3 CFR,

environmental impact 1977 Comp., p. 121]

(e.g., any physical specify additional

disturbance of a site considerations, when

such as breaking of actions involve

ground) until the floodplains or

grants officer wetlands,

provides written respectively.

notification of

compliance with the

environmental impact

analysis process.

2. Flood-prone areas, Grants, Any.............. Awards involving 42 U.S.C. 4012a

and provide help the cooperative construction, prohibits awards for

agency may need to agreements, and land acquisition acquisition or

comply with the other or development, construction in flood-

National Flood ``financial with some prone areas (Federal

Insurance Act of 1968 assistance'' exceptions [see Emergency Management

and Flood Disaster (see 42 U.S.C. 42 U.S.C. 4001, Agency publishes

Protection Act of 1973 4003). et seq.]. lists of such areas

(42 U.S.C. 4001, et in the Federal

seq.), which require Register), unless

flood insurance, when recipient has

available, for required insurance.

Federally assisted If action is in a

construction or floodplain, Executive

acquisition in flood- Order 11988 [3 CFR,

prone areas. 1977 Comp., p. 117]

specifies additional

pre-award procedures

for Federal agencies.

Recipients are to

apply requirements to

subawards

(``financial

assistance,'' defined

at 42 U.S.C. 4003,

includes indirect

Federal assistance.

[[Page 43887]]

3. Coastal zones, and Grants, State and local Awards that may 16 U.S.C. 1456(d)

provide help the cooperative governments, affect the prohibits approval of

agency may need to agreements, and interstate and coastal zone. projects inconsistent

comply with the other ``Federal other regional with a coastal

Coastal Zone assistance'' agencies. State's approved

Management Act of 1972 [see 16 U.S.C. management program

(16 U.S.C. 1451, et 1456(d)]. for the coastal zone.

seq.), concerning

protection of U.S.

coastal resources.

4. Coastal barriers, Grants, Any.............. Awards that may 16 U.S.C. 3504-3505

and provide help the cooperative affect barriers prohibit new awards

agency may need to agreements, and along the for actions within

comply with the other Atlantic and Coastal Barrier

Coastal Barriers ``financial Gulf coasts and System, except for

Resource Act (16 assistance'' Great Lakes' certain purposes.

U.S.C. 3501, et seq.), (see 16 U.S.C. shores. Requirements flow to

concerning 3502). subawards (16 U.S.C.

preservation of 3502 includes

barrier resources. indirect assistance

as ``financial

assistance'').

5. Any existing or Any.............. Any.............. Awards that may ......................

proposed component of affect existing

the National Wild and or proposed

Scenic Rivers system, element of

and provide help the National Wild

agency may need to and Scenic

comply with the Wild Rivers system.

and Scenic Rivers Act

of 1968 (16 U.S.C.

1271, et seq.).

6. Underground sources Any.............. Any.............. Construction in 42 U.S.C. 300h-3(e)

of drinking water in any area with precludes awards of

areas that have an aquifer that the Federal financial

aquifer that is the EPA finds would assistance for any

sole or principal create public project that the EPA

drinking water source, health hazard, administrator

and provide help the if contaminated. determines may

agency may need to contaminate a sole-

comply with the Safe source aquifer so as

Drinking Water Act (42 to threaten public

U.S.C. 300h-3). health.

National Historic Preservation

The recipient agrees to Any.............. Any.............. Any construction, 36 CFR part 800

identify to the awarding acquisition, requires grants

agency any property listed or modernization, officers to get

eligible for listing on the or other comments from the

National Register of Historic activity that Advisory Council on

Places that will be affected may impact a Historic Preservation

by this award, and to provide historic before proceeding

any help the awarding agency property. with Federally

may need, with respect to this assisted projects

award, to comply with Section that may affect

106 of the National Historic properties listed on

Preservation Act of 1966 (16 or eligible for

U.S.C. 470, et seq.), as listing on the

implemented by the Advisory National Register of

Council on Historic Historic Places.

Preservation regulations at 36

CFR part 800 and Executive

Order 11593 [3 CFR, 1971-1975

Comp., p. 559].

----------------------------------------------------------------------------------------------------------------

\1\ Copies may be obtained, at cost, from the National Technical Information Service, 5285 Port Royal Road,

Springfield, VA 22161. Authorized users may also obtain copies from the Defense Technical Information Center,

8725 John J. Kingman Rd., Suite 0944, Fort Belvoir, VA 22060-6218.

Appendix C to Part 22.--Administrative Requirements and Issues To Be Addressed in Award Terms and Conditions

--------------------------------------------------------------------------------------------------------------------------------------------------------

Source of requirement for each type of recipient (where details may

be found)

Requirement, in brief --------------------------------------------------------------------- Issues to be address in award terms/conditions

University or other

nonprofit Governmental entity Commercial entity

--------------------------------------------------------------------------------------------------------------------------------------------------------

Standards for Financial Management 32 CFR 32.21......... 32 CFR 33.20......... 32 CFR 34.11......... For university, nonprofit, or commercial

Systems. Recipients' systems to entity, specify if want:

comply with. Bonding and insurance [32 CFR

32.21(c) or 32 CFR 34.11(b)].

Fidelity bond [32 CFR 32.21(d) or 32

CFR 34.11(c)].

[[Page 43888]]

Payment. Recipients request 32 CFR 32.22......... 32 CFR 33.21, 33.41 32 CFR 34.12......... Specify:

payments and handle advances and (d) and (e). Payment method (e.g., advance,

interest in compliance with. reimbursement, working capital advance).

Note: if predetermined payment schedule is

used, must specify means to ensure that

recipients don't develop large cash balances

well in advance of needs for such funds

(e.g., recipient submits SF-269 or SF-270

forms at regular intervals, for grants

officer to review recipients' cash on hand).

SF-270, SF-271, or other form to

request payment.

Name/address of office to which

recipient sends payment requests and office

that will make payments.

How frequently recipient may submit

payment requests.

Allowable costs. Allowability of 32 CFR 32.37 and 32 CFR 33.22 and 32 CFR 34.17.........

costs to be in accordance with. 32.28. 33.23.

Fee/profit. None allowed........... ..................... ..................... 32 CFR 34.18.........

Cost share or match. If cost share 32 CFR 32.23......... 32 CFR 33.24......... 32 CFR 34.13......... Specify if want to allow inclusion of certain

or match is required, allowability types of items as cost share or allow them to

and valuation are governed by. be valued in certain ways [32 CFR 32.23 (b),

(c), and (g); 32 CFR 33.24 (b)(4), (b)(5),

and (e)(2); 32 CFR 34.13 (a)(7), (b)(1), and

(b)(4)(ii)].

Program income. Recipients account 32 CFR 32.24......... 32 CFR 33.25......... 32 CFR 34.14......... Specify:

for program income in accordance Method for disposition [32 CFR 32.24

with. (b), (c), and (d); 32 CFR 33.25(g); 32 CFR

34.14 (d), (e), and (f)].

If want recipient to have obligation

to Government for certain types of income or

for income earned after end of project period

[32 CFR 32.24 (e) and (h), 32 CFR 33.25 (a),

(d), (e), and (h); 32 CFR 34.14(b)].

If want to allow recipient to deduct

costs of generating income [32 CFR 32.24(f);

32 CFR 33.25(c); 32 CFR 34.14(c)].

Revision of budget/program plans. 32 CFR 32.25......... 32 CFR 33.30......... 32 CFR 34.15......... Specify:

Recipients request prior approval If wish to waive some prior approvals

for plan changes, in accordance that are optional, but are in effect unless

with. specifically waived [32 CFR 33.30 (b),

(c)(1), (d)(3); 32 CFR 34.15(c)(2)].

If wish to require some prior

approvals that are optional, but are only in

effect if specifically stated [32 CFR 32.25

(d), (e), (h); 32 CFR 34.15(c)(3)].

Audit. Recipients periodically to 32 CFR 32.26......... 32 CFR 33.26......... 32 CFR 34.16......... Require all but commercial entities to submit

have independent, financial and copy of OMB Circular A-133 or A-128 audit

compliance audit and report to reports to IG, DoD. Require commercial

DoD, subject to provisions of. entities to submit audit reports to whichever

office(s) the DoD Component wishes audit

reports to be sent.

Property. Recipients manage in 32 CFR 32.30 through 32 CFR 33.31 through 32 CFR 34.20 through Specify if want:

accordance with. 32.37. 33.34. 34.25. To allow commercial entities to

acquire real property under awards [32 CFR

34.21(a)].

University or other nonprofit to have

any further obligation to Government for

exempt property [32 CFR 32.33(b)].

To retain right to transfer title [32

CFR 32.34(h); 32 CFR 33.32(g)].

To allow recipients to use equipment

for certain purposes [32 CFR 32.34 (d) and

(e); 32 CFR 33.32(c)(4); 32 CFR 34.21(d)].

To waive data rights [32 CFR

32.36(c); 32 CFR 34.24(b)(1)(ii)].

To require recipients to record liens

[32 CFR 32.37].

For research awards to certain recipients,

include patents clause required by 37 CFR 401

[32 CFR 32.36(b); 32 CFR 34.24(a)].

Procurement. Recipients systems for 32 CFR 32.40 through 32 CFR 33.36......... 32 CFR 34.30 through Specify if want to require recipient to make

acquiring goo

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