OMB Circular A-110, ``Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations''

OFFICE OF MANAGEMENT AND BUDGET

OMB Circular A-110, ``Uniform Administrative Requirements for

Grants and Agreements With Institutions of Higher Education, Hospitals,

and Other Non-Profit Organizations''

AGENCY: Office of Management and Budget, Executive Office of the

President

ACTION: Final Revision

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SUMMARY: This notice finalizes the revision to OMB Circular A-110,

required by a provision of OMB's appropriation for fiscal year (FY)

1999, contained in Public Law 105-277. The provision directs OMB to

amend Section __.36, Intangible property, of the Circular ``to require

Federal awarding agencies to ensure that all data produced under an

award will be made available to the public through the procedures

established under the Freedom of Information Act'' (FOIA). Pursuant to

the direction of the provision contained in Public Law 105-277, OMB

published a Notice of Proposed Revision on February 4, 1999 (64 FR

5684), and a request for comments on clarifying changes to the proposed

revision on August 11, 1999 (64 FR 43786). We received over 9,000

comments on the proposed revision and over 3,000 comments on the

clarifying changes.

After a review of the comments on the clarifying changes, as well

as the comments on the proposed revision, OMB is issuing this final

revision to the Circular, as required by the provision contained in

Public Law 105-277.

DATES: The revised Circular is effective November 8, 1999.

ADDRESSES: You may obtain the full text of the Circular, the text of

this notice, and the text of the February 4th and August 11th notices

on OMB's home page (http://www.whitehouse.gov/OMB), under the heading

``Grants Management.'' You many obtain copies of Public Law 105-277 on

the Library of Congress's home page (http://thomas.loc.gov).

FOR FURTHER INFORMATION CONTACT: F. James Charney, Policy Analyst,

Office of Management and Budget, at (202) 395-3993. Please direct press

inquiries to OMB's Communications Office, at (202) 395-7254.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Statutory Direction to Amend Circular A-110

Congress included a two-sentence provision in OMB's appropriation

for FY 1999, contained in Public Law 105-277, directing OMB to amend

Section __.36 of the Circular ``to require Federal awarding agencies to

ensure that all data produced under an award will be made available to

the public through the procedures established under the Freedom of

Information Act.'' The provision also provides for a reasonable fee to

cover the costs incurred in responding to a request. The Circular

applies to grants and other financial assistance provided to

institutions of higher education, hospitals, and non-profit

institutions, from all Federal agencies.

In directing OMB to revise the Circular, Congress entrusted OMB

with the authority to resolve statutory ambiguities, the obligation to

address implementation issues the statute did not address, and the

discretion to balance the need for public access to research data with

protections of the research process. In developing this revision to the

Circular, OMB seeks to implement the statutory language fairly, in the

context of its legislative history. This requires a balanced approach

that (1) furthers the interest of the public in obtaining the

information needed to validate Federally-funded research findings, (2)

ensures that research can continue to be conducted in accordance with

the traditional scientific process, and (3) implements a public access

process that will be workable in practice.

OMB recognizes the importance of ensuring that the revised Circular

does not interfere with the traditional scientific process. Science and

technology are the principal agents of change and progress, with over

half of the Nation's labor productivity growth in the last 50 years

attributable to technological innovation and the science that supports

it. Although the private sector makes many investments in technology

development, the Federal Government has an important role to play--

particularly when risks appear too great or the return to companies too

speculative. Its support of cutting-edge science contributes to new

knowledge and greater understanding, ranging from the edge of the

universe to the smallest

[[Page 54927]]

imaginable particles. When the Federal Government changes the

requirements that apply to researchers whom it funds, it needs to

ensure that the changes do not interfere with cutting-edge science and

the benefits that such science provides to the American people.

During the revision process, many commenters expressed concern that

the statute would compel Federally-funded researchers to work in a

``fishbowl'' in which they would be required to reveal the results of

their research, and their research methods, prematurely. They argued

that this could prevent researchers from operating under the

traditional scientific process. As in many other fields of endeavor,

scientists need to deliberate over, develop, and pursue alternative

approaches in their research before making results public. When a

scientist is sufficiently confident of their results, they publish them

for the scrutiny of other scientists and the community at large.

Accordingly, in light of this traditional scientific process, we have

not construed the statute as requiring scientists to make research data

publicly available while the research is still ongoing.

B. OMB's Two Requests for Public Comment on the Proposed Revision

To address implementation issues, OMB published two notices in the

Federal Register requesting public comment on the proposed revision to

the Circular. Interested parties can consult these notices, which

provide extensive background information, for a more complete

understanding of the final revision. The original proposal appeared on

February 4, 1999 (64 FR 5684). It would have revised Section __.36 of

the Circular to read as follows:

(c) The Federal Government has the right to (1) obtain,

reproduce, publish or otherwise use the data first produced under an

award, and (2) authorize others to receive, reproduce, publish, or

otherwise use such data for Federal purposes. In addition, in

response to a Freedom of Information Act (FOIA) request for data

relating to published research findings produced under an award that

were used by the Federal Government in developing policy or rules,

the Federal awarding agency shall, within a reasonable time, obtain

the requested data so that they can be made available to the public

through the procedures established under the FOIA. If the Federal

awarding agency obtains the data solely in response to a FOIA

request, the agency may charge the requester a reasonable fee

equaling the full incremental cost of obtaining the data. This fee

should reflect costs incurred by the agency, the recipient, and

applicable subrecipients. This fee is in addition to any fees the

agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).

OMB received over 9,000 comments in response to the proposed revision.

Commenters offered strongly differing views on the provision contained

in Public Law 105-277. Those who supported the statutory provision

stated that the public has a right to obtain research data that have

been funded with tax dollars, particularly when the research findings

were used by the Federal Government in developing policy or rules.

These commenters also expressed the view that making this data

available for public review and validation would improve the scientific

process. Commenters who opposed the provision contained in Public Law

105-277 stated that they support the concepts of full disclosure and

open access to information. They acknowledged that the traditional

scientific process operates by requiring researchers to subject their

findings to the scrutiny of the scientific community and the general

public, so that those findings may be validated, corrected, or

rejected. However, they expressed concern that the approach required by

Public Law 105-277 would significantly impair scientific research. In

their view, individuals and businesses would be reluctant to agree to

participate in research, since the participants' personal privacy and

proprietary information could not be assured of confidential treatment.

Many commenters on the original proposal asked OMB to clarify four

concepts found in the proposed revision: ``data,'' ``published,''

``used by the Federal Government in developing policy or rules,'' and

cost reimbursement. OMB agreed that clarification was needed for these

concepts. On August 11, 1999, OMB published a second notice (64 FR

43786), requesting public comment on clarifications to the proposed

revision:

(c) The Federal Government has the right to: (1) Obtain,

reproduce, publish or otherwise use the data first produced under an

award; and (2) authorize others to receive, reproduce, publish, or

otherwise use such data for Federal purposes.

(d)(1) In addition, in response to a Freedom of Information Act

(FOIA) request for research data relating to published research

findings produced under an award that were used by the Federal

Government in developing a regulation, the Federal awarding agency

shall request, and the recipient shall provide, within a reasonable

time, the research data so that they can be made available to the

public through the procedures established under the FOIA. If the

Federal awarding agency obtains the research data solely in response

to a FOIA request, the agency may charge the requester a reasonable

fee equaling the full incremental cost of obtaining the research

data. This fee should reflect costs incurred by the agency, the

recipient, and applicable subrecipients. This fee is in addition to

any fees the agency may assess under the FOIA (5 U.S.C.

552(a)(4)(A)).

(2) The following definitions are to be used for purposes of

paragraph (d) of this section:

(i) Research data is defined as the recorded factual material

commonly accepted in the scientific community as necessary to

validate researching findings, but not any of the following:

Preliminary analyses, drafts of scientific papers, plans for future

research, peer reviews, or communications with colleagues. This

``recorded'' material excludes physical objects (e.g., laboratory

samples). Research data also do not include: (A) Trade secrets,

commercial information, materials necessary to be held confidential

by a researcher until publication of their results in a peer-

reviewed journal, or information which may be copyrighted or

patented; and (B) personnel and medical files and similar files the

disclosure of which would constitute a clearly unwarranted invasion

of personal privacy, such as information that could be used to

identify a particular person in a research study.

(ii) Published is defined as either when: (A) Research findings

are published in a peer-reviewed scientific or technical journal; or

(B) a Federal agency publicly and officially cites to the research

findings in support of a regulation.

(iii) Used by the Federal Government in developing a regulation

is defined as when an agency publicly and officially cites to the

research findings in support of a regulation (for which notice and

comment is required under 5 U.S.C. 553).

The August 11th notice explained these clarifications were intended to

implement the statute in a manner that (1) furthers the interest of the

public in obtaining the information needed to validate Federally-funded

research findings, (2) ensures that research can continue to be

conducted in accordance with the traditional scientific process, and

(3) implements a public access process that will be workable in

practice. OMB received over 3,000 comments in response to the

clarifying changes.

After considering the views and concerns of all the commenters, OMB

now issues a final revision to the Circular. Although the final

revision resembles the clarifying changes proposed on August 11, 1999,

it reflects additional changes in response to the public comments.

Issuance of this final revision meets the statutory requirement

imposed by OMB's appropriation for FY 1999 within the time in which it

has legal effect. As OMB and the agencies develop experience with the

revised Circular, changes to the data access process may be considered.

These could range from technical and clarifying changes to substantive

revision or rescission. OMB also endeavors to

[[Page 54928]]

review each of its Circulars every three years.

II. Comments on the Clarifying Changes to the Proposed Revision

A. Research Data

A number of commenters objected that the proposed definition of

``research data'' would transfer authority to determine which records

are exempt from mandatory disclosure under FOIA from Federal agencies

to recipients. It was not OMB's intent to transfer the agency's FOIA

exemption authority to recipients. Rather, we were providing a

definition for what constitutes research ``data,'' a term that is not

defined in the provision contained in Public Law 105-277. We have

always understood that it would be the recipient, not Federal agency

staff, who would identify the research data in the recipient's files

which are responsive to a FOIA request. In the over 12,000 comments OMB

received on the proposed revision, we are not aware of any suggestion

that Federal agency staff should perform the search of a recipient's

offices to identify responsive research data. The fact that the

recipient is responsible for searching for, and identifying, the

research data does not mean the Circular has transferred the agencies'

responsibility to recipients. When the recipient searches files for

responsive research data, pursuant to section .__36(d), and in so doing

applies the definition of ``research data,'' the recipient is not

exercising the agencies'' authority under FOIA to determine exemptions.

Rather, the recipient is simply identifying the research data that must

be provided to the agency. The Federal awarding agency would retain its

right to ask the recipient for additional information, if it believed

the recipient's submission was not complete.

Several commenters expressed concern because the proposed

definition of ``research data'' excluded ``information which may be

copyrighted or patented.'' These commenters believed the proposed

language was too broad. They argued that, under copyright law, a wide

range of materials ``may be'' copyrighted, and therefore that such a

test could have unintended consequences for the scope of the public

access process. In reviewing this language, we note that the

protections available in the other parts of the definition (in

particular, those protecting ``trade secrets'' and ``commercial

information'') broadly protect the intellectual property rights of

researchers. The proposed definition was not intended to create

additional protections for intellectual property, but rather to ensure

that existing protections continue to be respected. To avoid unintended

consequences, and to avoid having to sort out the complexities of

copyright law (and how it might apply in various areas of Federally-

funded research), the final revision substitutes ``similar information

which is protected under law'' for ``information which may be

copyrighted or patented.'' This language is intended to ensure that the

public access process will not upset intellectual property rights that

are elsewhere recognized and protected under the law.

Many commenters suggested a change to the definition of ``research

data'' to ensure that appropriate data were protected from disclosure,

no matter what the format. Their suggestion was to replace the word

``files'' with the word ``information'' in the phrase ``[p]ersonnel and

medical files and similar files the disclosure of which would

constitute a clearly unwarranted invasion of personal privacy.''

Examples of research data that might not be considered to be in the

form of a ``file'' include video or audio tapes of research subjects.

We agree with this technical change and have included it in the final

revision to the Circular.

Several commenters noted that the definition of ``research data''

excluded ``materials necessary to be held confidential until

publication of their results in a peer-reviewed journal.'' However,

since this language is not exactly the same as that used in the

definition of ``published,'' (``either when: (A) Research findings are

published in a peer-reviewed scientific or technical journal; or (B) A

Federal agency publicly and officially cites the research findings in

support of an agency action that has the force and effect of law'') it

appeared that the two might be in conflict. We have revised the

definition of ``research data'' to avoid any conflict between the two

definitions.

Finally, several commenters asked for a clarification to the

revision pertaining to research data already available to the public.

They suggested that if a request is made for research data the

recipient has already made available to the public, through a data

archive or other means, further action should not be necessary. Since

this principle is used when a Federal agency responds to FOIA requests,

it makes sense to apply it in this case as well. However, the Federal

awarding agency should respond to the FOIA request with directions on

how the requester can access the publicly available research data.

B. Used by the Federal Government in Developing a Regulation

A number of commenters objected to the definition which applied the

revision to research data that are used by the Federal Government in

developing a ``regulation.'' These commenters had generally been

satisfied with the language found in the proposed revision (``used by

the Federal Government in developing policy or rules''), because it had

been used by congressional sponsors during the legislative

consideration of Public Law 105-277. However, these commenters believed

that the clarifying changes significantly narrowed the scope of the

revision.

As we explained in the August 11th notice, its clarification was

intended ``to ensure that members of the public can obtain the

information needed to validate those Federally-funded research findings

on which Federal agencies rely when they take actions that have the

force and effect of law, while at the same time ensuring that the

provision contained in Public Law 105-277 can be administered in a

manner that is workable for members of the public, Federal agencies and

their recipients'' (64 FR 43791). We sought to refer to agency actions

that have ``the force and effect of law'' when it included ``a

regulation (for which notice and comment is required under 5 U.S.C.

553)'' in the proposed definitions. While it is true that agencies also

take actions that have ``the force and effect of law'' when they issue

administrative orders (e.g., decisions issued by administrative law

judges), we think that agencies rarely rely on Federally-funded

research in the context of their administrative orders. Nevertheless,

in response to the comments, we have changed the revision to refer to

``an agency action that has the force and effect of law'' rather than

to ``a regulation.''

We believe this change addresses the concerns of most commenters.

We note that a comment letter from Senators Shelby, Lott, Campbell, and

Gramm stated that the revision should not be limited to regulations,

but should apply generally to ``federal actions that can dramatically

impact the public.'' Agency actions that have ``the force and effect of

law'' certainly represent ``federal actions that can dramatically

impact the public.'' Indeed, it is through actions that have the force

and effect of law that an agency (in the words of one business

association) ``imposes costs, mandates, restrictions, obligations and

responsibilities on the regulated community.'' However, as stated in

the August 11th notice, we have decided

[[Page 54929]]

not to extend the scope of the revision to agency guidance documents

and other issuances that do not have the force and effect of law. We

continue to believe that the public interest in such access is less

than where the agency is taking action that has the force and effect of

law, and that the revision would not be workable in those

circumstances. Some commenters, who argued for a broader application,

nevertheless were sympathetic to OMB's desire that the public access

provision be workable. For example, one commenter stated that ``the

reproposal may be a workable first step in implementation. OMB could

start with its August position and see how the system works.''

A number of commenters raised a concern about whether requesters

would be able to obtain the research data sufficiently in advance of

when public comments are due on proposed regulations. These commenters

offered various suggestions for how the Circular might be revised to

address this concern. In the prior two notices, OMB has proposed a

``reasonable time'' standard for the response to a request for research

data. Since OMB and the agencies do not yet have experience with

implementing the public access process, we believe the ``reasonable

time'' standard, which allows consideration of the circumstances of a

particular case, is appropriate. As OMB and the agencies gain

experience with the public access process, we may be able to develop

further clarification on this point.

Finally, in the August 11th notice, OMB also requested comment ``on

whether limiting the scope of the proposed revision to regulations that

meet (a) $100 million [impact] threshold would be appropriate'' (64 FR

43791). Such a limitation received strong support, as well as strong

opposition from commenters. For now, we have decided not to limit the

scope of the revision to agency actions that have an impact in excess

of $100 million. As OMB and the agencies develop experience from

implementing the revision, we may revisit this issue.

C. Published

Commenters generally supported the proposed definition of

``published.'' Some in the research community were more supportive of

the first part of the definition (when ``(r)esearch findings are

published in a peer-reviewed scientific or technical journal'') rather

than the second part (when ``(a) Federal agency publicly and officially

cites the research findings in support of'' an agency action). However,

those who support the provision in Public Law 105-277 argued that the

second part is necessary to ensure that the public can have access to

the data that underlies Federally-funded research findings on which

agencies rely to support their actions. We continue to believe that

both parts of the definition are important to successful implementation

of a data access provision that furthers the interest of the public in

obtaining information while ensuring that research can continue to be

conducted in accordance with the traditional scientific process. The

only change that has been made to the definition of ``published'' is to

make conforming revisions to reflect the previously-discussed change

from ``used by the Federal Government in developing a regulation'' to

``used by the Federal Government in developing an agency action that

has the force and effect of law.''

D. Cost Reimbursement

Many commenters, particularly recipients of Federally-funded

research awards, expressed concern about the reimbursement mechanisms

available under the proposed revision. In cases where the award's

funding period expires before a request is made, neither the direct nor

indirect methods of charging would allow reimbursement. Comments

generally focused on the need for a separate agreement between the

Federal awarding agency and the recipient, which would cover the full

incremental cost of responding to the request. The process for such an

agreement could work as follows:

When a request is received by the Federal awarding agency, it would

pass the request on to the recipient for an assessment of the costs of

complying. Once the recipient has estimated an amount, the Federal

awarding agency can apply its existing standards for requesting

appropriate prepayments from the requester, as with the FOIA fee. When

the recipient transmits the responsive research data to the agency, it

should include an accounting for the associated costs. The Federal

awarding agency will then seek reimbursement from the FOIA requester

and reimburse the recipient.

If we determine that this mechanism is not adequate, we will

consider revising OMB Circular A-21, ``Cost Principles for Educational

Institutions,'' as necessary to ensure that recipient institutions are

reimbursed for the incremental costs of complying with the provision

contained in Public Law 105-277.

E. Record Retention

Some commenters questioned whether the final revision would impose

additional record retention requirements on recipients. The final

revision only affects Section .__36, which does not discuss

recordkeeping responsibilities. Section .__53, Retention and access

requirements for records, requires that ``(f)inancial records,

supporting documents, statistical records, and all other records

pertinent to an award shall be retained for a period of three years

from the date of submission of the final expenditure report.'' In

addition, ``(t)he Federal awarding agency * * * ha(s) the right of

timely and unrestricted access to any books, documents, papers, or

other records of recipients that are pertinent to the awards * * *. The

rights of access in this paragraph are not limited to the required

retention period, but shall last as long as records are retained.''

Therefore, if a recipient chooses to keep records longer than three

years, the recipient must make them available for review in response to

requests from the Federal awarding agency.

F. Effective Date

Many commenters sought clarification on the effective date for the

final revision. As stated above, the revised Circular is effective

thirty days after it appears in the Federal Register. The revised

Circular is effective for awards issued after the effective date and

those continuing awards which are renewed after the effective date.

G. Projects Funded From Multiple Sources

Some commenters asked whether the final revision would apply in

situations where research was funded not only by the Federal Government

but also by other entities. As noted in the proposed revision, the

legislative history to the provision contained in Public Law 105-277

indicates that ``the amended Circular shall apply to all Federally-

funded research, regardless of the level of funding or whether the

award recipient is also using non-Federal funds.'' 144 Cong. Rec.

S12134 (October 9, 1998) (Statement of Sen. Campbell). This statement

is consistent with OMB's longstanding interpretation of the Circular

which holds that it is applicable to all recipients, regardless of

whether they also receive non-Federal funds.

H. Procurement Contracts

Some commenters asked whether the final revision would apply to

research that is funded by a Federal agency

[[Page 54930]]

through a procurement contract. However, the Circular does not apply to

procurement contracts. Section .__2(e) of the Circular defines

``award,'' and specifically excludes ``contracts which are required to

be entered into and administered under procurement laws and

regulations.''

Issued in Washington, DC, September 30, 1999.

Jacob J. Lew,

Director.

As directed by OMB's appropriation for FY 1999, contained in Public

Law 105-277, OMB hereby amends Section __.36 of OMB Circular A-110 by

revising paragraph (c), redesignating paragraph (d) as paragraph (e),

and adding a new paragraph (d) to read as follows:

__ .36 Intangible property.

* * * * *

(c) The Federal Government has the right to:

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

produced under an award; and

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

use such data for Federal purposes.

(d)(1) In addition, in response to a Freedom of Information Act

(FOIA) request for research data relating to published research

findings produced under an award that were used by the Federal

Government in developing an agency action that has the force and effect

of law, the Federal awarding agency shall request, and the recipient

shall provide, within a reasonable time, the research data so that they

can be made available to the public through the procedures established

under the FOIA. If the Federal awarding agency obtains the research

data solely in response to a FOIA request, the agency may charge the

requester a reasonable fee equaling the full incremental cost of

obtaining the research data. This fee should reflect costs incurred by

the agency, the recipient, and applicable subrecipients. This fee is in

addition to any fees the agency may assess under the FOIA (5 U.S.C.

552(a)(4)(A)).

(2) The following definitions apply for purposes of paragraph (d)

of this section:

(i) Research data is defined as the recorded factual material

commonly accepted in the scientific community as necessary to validate

research findings, but not any of the following: preliminary analyses,

drafts of scientific papers, plans for future research, peer reviews,

or communications with colleagues. This ``recorded'' material excludes

physical objects (e.g., laboratory samples). Research data also do not

include:

(A) Trade secrets, commercial information, materials necessary to

be held confidential by a researcher until they are published, or

similar information which is protected under law; and

(B) Personnel and medical information and similar information the

disclosure of which would constitute a clearly unwarranted invasion of

personal privacy, such as information that could be used to identify a

particular person in a research study.

(ii) Published is defined as either when:

(A) Research findings are published in a peer-reviewed scientific

or technical journal; or

(B) A Federal agency publicly and officially cites the research

findings in support of an agency action that has the force and effect

of law.

(iii) Used by the Federal Government in developing an agency action

that has the force and effect of law is defined as when an agency

publicly and officially cites the research findings in support of an

agency action that has the force and effect of law.

[FR Doc. 99-26264 Filed 10-7-99; 8:45 am]

BILLING CODE 3110-01-P