# 65 FR 24768: Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, Other Non-Profit Organizations, and Commercial Organizations

> Federal · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-9399

## Section

- **Citation:** 65 FR 24768
- **Heading:** Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, Other Non-Profit Organizations, and Commercial Organizations
- **Jurisdiction:** Federal
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Federal Register / Vol. 65 / 65 FR 24768

## Text

SOCIAL SECURITY ADMINISTRATION 20 CFR Part 435 RIN 0960-AE25 Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, Other Non-Profit Organizations, and Commercial Organizations AGENCY:
Social Security Administration (SSA).

ACTION:
Notice of Proposed Rule Making (NPRM).

SUMMARY:
The proposed rule would create a new Part in the Code of Federal Regulations. The new part would provide standards in the administration of grants and agreements with institutions of higher education, hospitals, other non-profit organizations, and commercial organizations.
The Social Security Independence and Program Improvements Act of 1994, enacted August 15, 1994, established SSA as an independent agency separate from the Department of Health and Human Services (HHS), effective March 31, 1995. To implement its own set of grants regulations, SSA proposes to codify almost verbatim the text of the Office of Management and Budget (OMB) Circular Number A-110 “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations.” These regulations would establish SSA grants regulations, separate from the HHS regulations. We plan to publish additional regulations on the subject of grants at a future date.

DATES:
To be sure your comments are considered, we must receive them no later than June 26, 2000.

ADDRESSES:
Comments should be submitted in writing to the Commissioner of Social Security, P.O. Box 1585, Baltimore, Maryland 21235-6401. Comments may be sent by telefax to (410) 966-2830, sent by E-mail to “regulations@ssa.gov,” or delivered to the Social Security Administration, 2109 West Low Rise Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8:00 a.m. and 4:30 p.m. on regular business days. Comments may be inspected during these same hours by making arrangements with the contact person shown below
235-6401. Comments may be sent by telefax to (410) 966-2830, sent by E-mail to “regulations@ssa.gov,” or delivered to the Social Security Administration, 2109 West Low Rise Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8:00 a.m. and 4:30 p.m. on regular business days. Comments may be inspected during these same hours by making arrangements with the contact person shown below. The electronic file of this document is available on the Internet at www.access.gpo.gov/su— docs/aces/aces140.htm at 6:00 a.m. on the date of publication in the Federal Register . It is also available on the Internet site for SSA (i.e., SSA Online), http://www.ssa.gov/.
FOR FURTHER INFORMATION CONTACT:
E. Joe Smith, Grants Management Officer, Office of Operations Contracts and Grants, Office of Acquisition and Grants, SSA, 1710 Gwynn Oak Ave., Baltimore, MD 21207-5279; telephone (410) 965-9503; fax (410) 966-9310.

SUPPLEMENTARY INFORMATION:
I. Background
OMB Circular A-110 (Circular) provides standards for obtaining consistency and uniformity among Federal agencies in the administration of grants and agreements with institutions of higher education, hospitals, and other non-profit organizations. The Circular was originally issued in 1976 and, except for a minor revision in 1987, it remained unchanged until it was revised by OMB in 1993 (58 FR 62992). It was subsequently amended in 1997 (62 FR 45934) and 1999 (64 FR 54926).
In 1987, OMB convened an interagency task force to update the Circular. The work of the task force resulted in the publication of a 1988 notice in the Federal Register (53 FR 44716) proposing that the Circular be merged with OMB Circular A-102, “Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments” as a consolidated “common rule.” The public response led to a decision by OMB to not finalize the proposal
the Circular. The work of the task force resulted in the publication of a 1988 notice in the Federal Register (53 FR 44716) proposing that the Circular be merged with OMB Circular A-102, “Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments” as a consolidated “common rule.” The public response led to a decision by OMB to not finalize the proposal.
In November 1990, another interagency task force was established to revise the Circular and develop a set of common principles for the administration of grants and agreements with institutions of higher education, hospitals and other non-profit organizations. The task force solicited suggestions for changes to the Circular from university groups, non-profit organizations and other interested parties and compared, for consistency, the provisions of similar provisions applied to State and local governments. As a result, in August 1992, OMB published a notice in the Federal Register (57 FR 39018) requesting comments on proposed revisions to the Circular. OMB received over 200 comments from Federal agencies, non-profit organizations, professional organizations and others. OMB considered all comments in developing the final revision to the Circular. The Circular issued in 1993 reflects the results of these efforts. The revised Circular was developed in a model rule format to facilitate regulatory adoption by affected Federal agencies. OMB's notice directed each affected agency to promulgate its own rules adopting the language as it appears in the Circular unless different provisions are required by Federal statute or are approved by OMB (58 FR 62992-93). The notice states that OMB will review agency regulations and implementation of the Circular and will provide interpretations of policy requirements and assistance to insure effective and efficient implementation. Any exceptions will be subject to approval by OMB and will only be made in particular cases where adequate justification is presented
ral statute or are approved by OMB (58 FR 62992-93). The notice states that OMB will review agency regulations and implementation of the Circular and will provide interpretations of policy requirements and assistance to insure effective and efficient implementation. Any exceptions will be subject to approval by OMB and will only be made in particular cases where adequate justification is presented.
Except as provided therein, the standards set forth in the Circular are applicable to all Federal agencies. If any statute specifically prescribes policies or specific requirements that differ from the standards provided in the Circular, the provisions of the statute shall govern. Federal agencies must apply the provisions of the Circular in making awards to the covered entities. Recipients must apply the provisions of the Circular to subrecipients performing substantive work under grants and agreements that are passed through or awarded by the primary recipient, if such subrecipients are organizations that are covered entities. The Circular does not apply to grants, contracts, or other agreements between the Federal Government and units of State or local governments covered by OMB Circular A-102, “Grants and Cooperative Agreements with State and Local Governments.” And, it does not apply to the Federal agencies' grants management common rule that standardized and codified the administrative requirements Federal agencies impose on State and local grantees. In addition, the Circular does not cover subawards and contracts to State or local governments. However, the Circular applies to subawards made by State and local governments to organizations covered by the Circular. Federal agencies may apply the provisions of the Circular to commercial organizations, foreign governments, organizations under the jurisdiction of foreign governments, and international organizations
Circular does not cover subawards and contracts to State or local governments. However, the Circular applies to subawards made by State and local governments to organizations covered by the Circular. Federal agencies may apply the provisions of the Circular to commercial organizations, foreign governments, organizations under the jurisdiction of foreign governments, and international organizations.
HHS applies the provisions of Circular A-110 in making awards to institutions of higher education, hospitals, other non-profit organizations, and commercial organizations through its regulations at 45 CFR part 74. Prior to March 31, 1995, SSA was an operating component of HHS. As a result of Public Law 103-296, SSA became an independent agency on
SSA's new part 435 at 20 CFR will be similar to OMB Circular A-110. Consistent with the guidance provided in Circular A-110, this rule will apply to SSA awards made to institutions of higher education, hospitals, other non-profit organizations, and commercial organizations. When appropriate, this rule will also apply to foreign governments, organizations under the jurisdiction of foreign governments, and international organizations. The proposed rule does not apply to grants under programs commonly referred to as “entitlement programs.”
As noted above, OMB directed each affected agency to promulgate its own rules adopting the provisions of the Circular. Any exceptions or deviations, unless required by Federal statute, require OMB approval. Therefore, in support of OMB's desired uniformity, this proposed rule incorporates the provisions and language of revised Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations,” published by OMB on November 29, 1993 (58 FR 62992), as further amended August 29, 1997 (62 FR 45934) and November 8, 1999 (64 FR 54926).
II
desired uniformity, this proposed rule incorporates the provisions and language of revised Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations,” published by OMB on November 29, 1993 (58 FR 62992), as further amended August 29, 1997 (62 FR 45934) and November 8, 1999 (64 FR 54926).
II. Proposed Differences Between Part 435 and Circular A-110
The proposed rule contains a “SUBPART E—DISPUTES,” which sets forth the SSA appeal process for disputes arising under SSA grants and agreements. OMB Circular A-110 does not contain an appeal process for disputes.
Also, the proposed rule contains the following clarifying language and updates to procedures:
A. To be less generic and more agency specific, where appropriate, the terms “federal awarding agency(ies)” have been replaced by “SSA”.
B. In support of the plain language initiative, throughout the proposed rule, the word “shall” has been replaced by “must” or “will.” Our reason for this change is, the term “shall” sounds especially legalistic and could be open to interpretation. Also, in the interest of making it easier for users to locate material, we have used identifying labels for many of our first level paragraphs ( i.e. , a, b, c).
C. To be consistent with section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)), as amended by section 4001 of the Federal Acquisition Streamlining Act of 1994 (FASA), Pub. L. 103-355, the following updates have been made:
Sections 435.2 (definition for “Small awards”); 435.44(e)(2), (3), (4) and (5); 435.46; 435.48(a) (b) and (d); and Appendix A, “Debarment and Suspension” (paragraph 8) have been updated to replace the term “small purchase threshold” with the term “simplified acquisition threshold.” And, where appropriate, the current threshold dollar amount of $100,000 is reflected (instead of $25,000).
D
ade:
Sections 435.2 (definition for “Small awards”); 435.44(e)(2), (3), (4) and (5); 435.46; 435.48(a) (b) and (d); and Appendix A, “Debarment and Suspension” (paragraph 8) have been updated to replace the term “small purchase threshold” with the term “simplified acquisition threshold.” And, where appropriate, the current threshold dollar amount of $100,000 is reflected (instead of $25,000).
D. According to FASA, the threshold for the requirement to include the provision for compliance with sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) has been raised to $100,000. This update has been made in Appendix A.
E. Under the statute commonly referred to as the Byrd Anti-Lobbying Amendment, 31 U.S.C. 1352, the disclosure requirements apply to organizations that apply or bid for an award exceeding $100,000 (not $100,000 or more). This correction has been made in Appendix A.
III. Proposed Differences Between Part 435 and 45 CFR Part 74
In order to mirror the provisions and language of the Circular, SSA's proposed 20 CFR part 435 deviates from 45 CFR part 74. Also, Part 74's Subpart E (Special Provisions for Awards to Commercial Organizations) is not included in Part 435. We believe, however, the omission of this subpart will not have a negative effect on the quality and administration of the SSA grants program. The provisions of Subpart E are not needed in Part 435. Unless SSA provides otherwise in the terms and conditions of the award, and except where provided under the provisions of Circular A-110, SSA will make no distinction between awards to commercial organizations and awards to its other grantee organizations covered by the Circular.
Additionally, Part 74's “Subpart F-Disputes” is not included in the proposed rule. Instead, as noted in section II, above, the proposed rule contains a “SUBPART E—DISPUTES,” which sets forth the SSA appeal process for disputes arising under SSA grants and agreements
ke no distinction between awards to commercial organizations and awards to its other grantee organizations covered by the Circular.
Additionally, Part 74's “Subpart F-Disputes” is not included in the proposed rule. Instead, as noted in section II, above, the proposed rule contains a “SUBPART E—DISPUTES,” which sets forth the SSA appeal process for disputes arising under SSA grants and agreements.
Clarity of This Regulation
Executive Order 12866 and the President's memorandum of June 1, 1998, require each agency to write all rules in plain language. We invite your comments on how to make this proposed rule easier to understand. For example:
• Have we organized the material to suit your needs?
• Are the requirements in the rule clearly stated?
• Does the rule contain technical language or jargon that isn't clear?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the rule easier to understand?
• Would more (but shorter) sections be better?
• Could we improve clarity by adding tables, lists, or diagrams?
• What else could we do to make the rule easier to understand?
IV. Regulatory Procedures
Executive Order 12866
We have consulted with the Office of Management and Budget (OMB) and have determined that these proposed rules do not meet the criteria for a significant regulatory action under Executive Order 12866. Thus, they are not subject to OMB review.
Regulatory Flexibility Act
We certify that these proposed rules, if promulgated, will not have a significant economic impact on a substantial number of small entities because they merely reflect the adoption of existing grant policies and procedures by SSA and do not promulgate any new policies or procedures which would impact the public. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.
Paperwork Reduction Act
These proposed rules contain reporting requirements in 20 CFR part 435 in §§ 435.12, 435.22 and 435.52
ct the adoption of existing grant policies and procedures by SSA and do not promulgate any new policies or procedures which would impact the public. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.
Paperwork Reduction Act
These proposed rules contain reporting requirements in 20 CFR part 435 in §§ 435.12, 435.22 and 435.52. However, the reporting forms specified in these sections have already been approved by the Office of Management and Budget and, therefore, we are not seeking approval of the reporting requirements in these sections. The forms are as follows: SF-269, SF-269A, SF-424, SF-270, SF-271 and SF-272.
The proposed regulation contains additional reporting and recordkeeping requirements in the sections listed below. As required by the Paperwork Reduction Act of 1995, we have
Following is a table of the reporting (Rpt) and recordkeeping (Rec-kp) burdens imposed on the public:
Section No. No. of respondents Frequency of response Average burden per response (hours) Estimated annual burden (hours) 435.21 (Rec-kp) 1 N/A 40 40 435.23 (Rec-kp) 7 Monthly 1 84 435.25 (Rpt) 14 Biannually 4 112 435.33 (Rpt) 1 Annually 1 1 435.44 (Rpt) 1 Annually 2 2 435.51 (Rpt) 17 Quarterly 12 816 435.53 (Rec-kp) 17 Annually 8 136 435.81 (Rpt) 1 Annually 16 16 435.82 (Rpt) 1 Annually 8 8 Total estimated annual burden: 1215 The public burden includes the time it will take to understand what is needed, gather the necessary facts, and provide the information or maintain the specified records. If you have any comments or suggestions on the estimates, write to the Social Security Administration, ATTN: Reports Clearance Officer, 1-A-21 Operations Building, Baltimore, MD 21235
nually 8 8 Total estimated annual burden: 1215 The public burden includes the time it will take to understand what is needed, gather the necessary facts, and provide the information or maintain the specified records. If you have any comments or suggestions on the estimates, write to the Social Security Administration, ATTN: Reports Clearance Officer, 1-A-21 Operations Building, Baltimore, MD 21235.
SSA is soliciting comments from the public in order to:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques, or other forms of information technology ( e.g. , permitting electronic submission of responses).”
(Catalog of Federal Domestic Assistance Program No. 96.007—Social Security—Research and Demonstration) List of Subjects in 20 CFR Part 435
Accounting, Administrative practice and procedure, Colleges and universities, Grant programs—health, Grant programs—social programs, Hospitals, Nonprofit organizations, Reporting and recordkeeping requirements.

Dated: April 5, 2000. Kenneth S. Apfel, Commissioner of Social Security.
For the reasons set out in the preamble, we propose to add a new Part 435 to Chapter III of Title 20 of the Code of Federal Regulations to read as follows:
PART 435—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, OTHER NON-PROFIT ORGANIZATIONS, AND COMMERCIAL ORGANIZATIONS
Subpart A—General
435.1 Purpose. 435.2 Definitions
ty.
For the reasons set out in the preamble, we propose to add a new Part 435 to Chapter III of Title 20 of the Code of Federal Regulations to read as follows:
PART 435—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, OTHER NON-PROFIT ORGANIZATIONS, AND COMMERCIAL ORGANIZATIONS
Subpart A—General
435.1 Purpose. 435.2 Definitions. 435.3 Effect on other issuances. 435.4 Deviations. 435.5 Subawards. Subpart B—Pre-award Requirements
435.10 Purpose. 435.11 Pre-award policies. 435.12 Forms for applying for Federal assistance. 435.13 Debarment and suspension. [Reserved] 435.14 Special award conditions. 435.15 Metric system of measurement. 435.16 Resource Conservation and Recovery Act. 435.17 Certifications and representations. Subpart C—Post-award Requirements
Financial and Program Management
435.20 Purpose of financial and program management. 435.21 Standards for financial management systems. 435.22 Payment. 435.23 Cost sharing or matching. 435.24 Program income. 435.25 Revision of budget and program plans. 435.26 Non-Federal audits. 435.27 Allowable costs. 435.28 Period of availability of funds. Property Standards
435.30 Purpose of property standards. 435.31 Insurance coverage. 435.32 Real property. 435.33 Federally-owned and exempt property. 435.34 Equipment. 435.35 Supplies and other expendable property. 435.36 Intangible property. 435.37 Property trust relationship. Procurement Standards
435.40 Purpose of procurement standards. 435.41 Recipient responsibilities. 435.42 Codes of conduct. 435.43 Competition. 435.44 Procurement procedures. 435.45 Cost and price analysis. 435.46 Procurement records. 435.47 Contract administration. 435.48 Contract provisions. Reports and Records
435.50 Purpose of reports and records. 435.51 Monitoring and reporting program performance. 435.52 Financial reporting. 435.53 Retention and access requirements for records. Termination and Enforcement
435.60 Purpose of termination and enforcement
cedures. 435.45 Cost and price analysis. 435.46 Procurement records. 435.47 Contract administration. 435.48 Contract provisions. Reports and Records
435.50 Purpose of reports and records. 435.51 Monitoring and reporting program performance. 435.52 Financial reporting. 435.53 Retention and access requirements for records. Termination and Enforcement
435.60 Purpose of termination and enforcement. 435.61 Termination. 435.62 Enforcement. Subpart D—After-the-award Requirements
435.70 Purpose. 435.71 Closeout procedures. 435.72 Subsequent adjustments and continuing responsibilities. 435.73 Collection of amounts due. Subpart E—Disputes
435.80 Appeal process. 435.81 Initial appeal. 435.82 Appeal of decision of ACOAG. Appendix A to Part 435—Contract Provisions Authority:
5 U.S.C. 301.
Subpart A—General
§ 435.1 Purpose. This Part establishes SSA's administrative requirements for SSA grants and agreements awarded to institutions of higher education, hospitals, other non-profit organizations, and commercial organizations. The regulations in this part do not differ from the uniform regulations published in OMB Circular A-110 except as provided in §§ 435.4 and 435.14. Non-profit organizations that implement Federal programs for the States are also subject to State requirements. For availability of OMB circulars, see 5 CFR 1310.3.

§ 435.2 Definitions. (a) Accrued expenditures means the charges incurred by the recipient during a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients, and other payees; and,
(3) Other amounts becoming owed under programs for which no current services or performance is required.
(b) Accrued income means the sum of:
(1) Earnings during a given period from—
recipient during a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients, and other payees; and,
(3) Other amounts becoming owed under programs for which no current services or performance is required.
(b) Accrued income means the sum of:
(1) Earnings during a given period from—
(i) Services performed by the recipient, and
(ii) Goods and other tangible property delivered to purchasers, and
(2) Amounts becoming owed to the recipient for which no current services or performance is required by the recipient.
(c) Acquisition cost of equipment means the net invoice price of the equipment, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, must be included or excluded from the unit acquisition cost in accordance with the recipient's regular accounting practices.
(d) Advance means a payment made by Treasury check or other appropriate payment mechanism to a recipient upon its request either before outlays are made by the recipient or through the use of predetermined payment schedules.
(e) Award means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by the Federal Government to an eligible recipient. The term does not include: technical assistance, which provides services instead of money; other assistance in the form of loans, loan guarantees, interest subsidies, or insurance; direct payments of any kind to individuals; and, contracts which are required to be entered into and administered under procurement laws and regulations.
ng exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5000 or more per unit. However, consistent with recipient policy, lower limits may be established.
(m) Excess property means property under the control of SSA that, as determined by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
(n) Exempt property means tangible personal property acquired in whole or in part with Federal funds, where SSA has statutory authority to vest title in the recipient without further obligation to the Federal Government. An example of exempt property authority is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306), for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research.
(o) SSA means the Federal agency that provides an award to the recipient.
(p) Federal funds authorized means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount may include any authorized carryover of unobligated funds from prior funding periods when permitted by agency regulations or agency implementing instructions.
(q) Federal share of real property, equipment, or supplies means that percentage of the property's acquisition costs and any improvement expenditures paid with Federal funds.
(r) Funding period means the period of time when Federal funding is available for obligation by the recipient.
(s) Intangible property and debt instruments means, but is not limited to, trademarks, copyrights, patents and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership, whether considered tangible or intangible.
means the period of time when Federal funding is available for obligation by the recipient.
(s) Intangible property and debt instruments means, but is not limited to, trademarks, copyrights, patents and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership, whether considered tangible or intangible.
(t) Obligations means the amounts of orders placed, contracts and grants awarded, services received and similar transactions during a given period that require payment by the recipient during the same or a future period.
(u) Outlays or expenditures means charges made to the project or program. They may be reported on a cash or accrual basis.
(1) Cash basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied and the amount of cash advances and payments made to subrecipients.
(2) Accrual basis. For reports prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees and other amounts becoming owed under programs for which no current services or performance are required.
(v) Personal property means property of any kind except real property. It may
(w) Prior approval means written approval by an authorized SSA official evidencing prior consent.
ods and other property received, for services performed by employees, contractors, subrecipients and other payees and other amounts becoming owed under programs for which no current services or performance are required.
(v) Personal property means property of any kind except real property. It may
(w) Prior approval means written approval by an authorized SSA official evidencing prior consent.
(x) Program income means gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award (see exclusions in §§ 435.24(e) and (h)). Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in SSA regulations or the terms and conditions of the award, program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
(y) Project costs means all allowable costs, as set forth in the applicable Federal cost principles, incurred by a recipient and the value of the contributions made by third parties in accomplishing the objectives of the award during the project period.
award, program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
(y) Project costs means all allowable costs, as set forth in the applicable Federal cost principles, incurred by a recipient and the value of the contributions made by third parties in accomplishing the objectives of the award during the project period.
(z) Project period means the period established in the award document during which Federal sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property, equipment, intangible property and debt instruments.
(bb) Real property means land, including land improvements, structures and appurtenances thereto, but excludes movable machinery and equipment.
(cc) Recipient means an organization receiving financial assistance directly from SSA to carry out a project or program. The term includes public and private institutions of higher education, public and private hospitals, and other quasi-public and private non-profit organizations such as, but not limited to, community action agencies, research institutes, educational associations, and health centers. The term may include commercial organizations, foreign or international organizations (such as agencies of the United Nations) which are recipients, subrecipients, or contractors or subcontractors of recipients or subrecipients at the discretion of SSA. The term does not include government-owned contractor-operated facilities or research centers providing continued support for mission-oriented, large-scale programs that are government-owned or controlled, or are designated as federally-funded research and development centers.
(dd) Research and development means all research activities, both basic and applied, and all development activities that are supported at universities, colleges, and other non-profit institutions
r research centers providing continued support for mission-oriented, large-scale programs that are government-owned or controlled, or are designated as federally-funded research and development centers.
(dd) Research and development means all research activities, both basic and applied, and all development activities that are supported at universities, colleges, and other non-profit institutions. “Research” is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. “Development” is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.
(ee) Small awards means a grant or cooperative agreement not exceeding the simplified acquisition threshold fixed at 41 U.S.C. 403(11) (currently $100,000).
(ff) Subaward means an award of financial assistance in the form of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and services nor does it include any form of assistance which is excluded from the definition of “award” in paragraph (e) of this section.
(gg) Subrecipient means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided. The term may include foreign or international organizations (such as agencies of the United Nations) at the discretion of the Federal awarding agency
form of assistance which is excluded from the definition of “award” in paragraph (e) of this section.
(gg) Subrecipient means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided. The term may include foreign or international organizations (such as agencies of the United Nations) at the discretion of the Federal awarding agency.
(hh) Supplies means all personal property excluding equipment, intangible property, and debt instruments as defined in this section, and inventions of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement (“subject inventions”), as defined in 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements.”
(ii) Suspension means an action by SSA that temporarily withdraws Federal sponsorship under an award, pending corrective action by the recipient or pending a decision to terminate the award by SSA. Suspension of an award is a separate action from suspension under Federal agency regulations implementing Executive Orders 12549 and 12689, “Debarment and Suspension.”
(jj) Termination means the cancellation of Federal sponsorship, in whole or in part, under an agreement at any time prior to the date of completion.
(kk) Third party in-kind contributions means the value of non-cash contributions provided by non-Federal third parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.
(ll) Unliquidated obligations, for financial reports prepared on a cash basis, means the amount of obligations incurred by the recipient that have not been paid
s. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.
(ll) Unliquidated obligations, for financial reports prepared on a cash basis, means the amount of obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the recipient for which an outlay has not been recorded.
(mm) Unobligated balance means the portion of the funds authorized by SSA that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.
(nn) Unrecovered indirect cost means the difference between the amount awarded and the amount which could have been awarded under the recipient's approved negotiated indirect cost rate.
(oo) Working capital advance means a procedure whereby funds are advanced to the recipient to cover its estimated disbursement needs for a given initial period.

§ 435.3 Effect on other issuances. For awards subject to this Part, all administrative requirements of codified program regulations, program manuals, handbooks and other nonregulatory materials which are inconsistent with the requirements of this Part are superseded, except to the extent they are required by statute, or authorized in accordance with the deviations provision in § 435.4.

§ 435.4 Deviations. The Office of Management and Budget (OMB) may grant exceptions for classes of grants or recipients subject to the

§ 435.5 Subawards. Unless sections of this Part specifically exclude subrecipients from coverage, the provisions of this Part will be applied to subrecipients performing work under awards if such subrecipients are institutions of higher education, hospitals, other non-profit, or commercial organizations.

Subpart B—Pre-award Requirements
§ 435.10 Purpose
rants or recipients subject to the

§ 435.5 Subawards. Unless sections of this Part specifically exclude subrecipients from coverage, the provisions of this Part will be applied to subrecipients performing work under awards if such subrecipients are institutions of higher education, hospitals, other non-profit, or commercial organizations.

Subpart B—Pre-award Requirements
§ 435.10 Purpose. Sections 435.11 through 435.17 prescribe forms and instructions and other pre-award matters to be used in applying for Federal awards.

§ 435.11 Pre-award policies. (a) Use of grants and cooperative agreements, and contracts. In each instance, SSA will decide on the appropriate award instrument (i.e., grant, cooperative agreement, or contract). The Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of grants, cooperative agreements and contracts.
(1) Grants and cooperative agreements. A grant or cooperative agreement will be used only when the principal purpose of a transaction is to accomplish a public purpose of support or stimulation authorized by Federal statute. The statutory criterion for choosing between grants and cooperative agreements is that for the latter, “substantial involvement is expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.”
(2) Contracts. Contracts will be used when the principal purpose is acquisition of property or services for the direct benefit or use of the Federal Government.
ants and cooperative agreements is that for the latter, “substantial involvement is expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.”
(2) Contracts. Contracts will be used when the principal purpose is acquisition of property or services for the direct benefit or use of the Federal Government.
(b) Public Notice and priority setting. SSA will notify the public of its intended funding priorities for discretionary grant programs, unless funding priorities are established by Federal statute.

§ 435.12 Forms for applying for Federal assistance. (a) SSA must comply with the applicable report clearance requirements of 5 CFR part 1320, “Controlling Paperwork Burdens on the Public,” with regard to all forms used by SSA in place of or as a supplement to the Standard Form 424 (SF-424) series.
(b) Applicants must use the SF-424 series or those forms and instructions prescribed by SSA.
(c) For Federal programs covered by Executive Order 12372, “Intergovernmental Review of Federal Programs” (3 CFR, 1982 Comp., p. 197), the applicant must complete the appropriate sections of the SF-424 (Application for Federal Assistance) indicating whether the application was subject to review by the State Single Point of Contact (SPOC). The name and address of the SPOC for a particular State can be obtained from SSA or the Catalog of Federal Domestic Assistance. The SPOC will advise the applicant whether the program for which application is made has been selected by that State for review.

§ 435.13 Debarment and suspension. [Reserved]
§ 435.14 Special award conditions. (a) When special conditions may apply. SSA may impose additional requirements, as needed, if an applicant or recipient:
(1) Has a history of poor performance,
(2) Is not financially stable,
(3) Has a management system that does not meet the standards prescribed in this Part,
(4) Has not conformed to the terms and conditions of a previous award, or
ved]
§ 435.14 Special award conditions. (a) When special conditions may apply. SSA may impose additional requirements, as needed, if an applicant or recipient:
(1) Has a history of poor performance,
(2) Is not financially stable,
(3) Has a management system that does not meet the standards prescribed in this Part,
(4) Has not conformed to the terms and conditions of a previous award, or
(5) Is not otherwise responsible.
(b) Notice of special conditions. When imposing additional requirements, SSA will notify the recipient in writing as to:
(1) The nature of the additional requirements,
(2) The reason why the additional requirements are being imposed,
(3) The nature of the corrective action needed,
(4) The time allowed for completing the corrective actions, and
(5) The method for requesting reconsideration of the additional requirements imposed.
(c) Any special conditions will be promptly removed once the conditions that prompted them have been corrected.

§ 435.15 Metric system of measurement. The Metric Conversion Act, as amended by the Omnibus Trade and Competitiveness Act (15 U.S.C. 205) declares that the metric system is the preferred measurement system for U.S. trade and commerce. The Act requires each Federal agency to establish a date or dates, in consultation with the Secretary of Commerce, when the metric system of measurement will be used in the agency's procurements, grants, and other business-related activities. Metric implementation may take longer where the use of the system is initially impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities. SSA follows the provisions of Executive Order 12770, “Metric Usage in Federal Government Programs” (3 CFR, 1991 Comp., p. 343).

§ 435.16 Resource Conservation and Recovery Act
business-related activities. Metric implementation may take longer where the use of the system is initially impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities. SSA follows the provisions of Executive Order 12770, “Metric Usage in Federal Government Programs” (3 CFR, 1991 Comp., p. 343).

§ 435.16 Resource Conservation and Recovery Act. Any State agency or agency of a political subdivision of a State which is using appropriated Federal funds must comply with section 6002 of the Resource Conservation and Recovery Act (RCRA) (Public Law 94-580; 42 U.S.C. 6962). Section 6002 requires that preference be given in procurement programs to the purchase of specific products containing recycled materials identified in guidelines developed by the Environmental Protection Agency (EPA) (40 CFR parts 247-254). Accordingly, State and local institutions of higher education, hospitals, and non-profit organizations that receive direct Federal awards or other Federal funds must give preference in their procurement programs funded with Federal funds to the purchase of recycled products pursuant to the EPA guidelines.

§ 435.17 Certifications and representations. Unless prohibited by statute or codified regulation, SSA will allow recipients to submit certifications and representations required by statute, executive order, or regulation on an annual basis, if the recipients have ongoing and continuing relationships with the agency. Annual certifications and representations must be signed by responsible officials with the authority to ensure recipients' compliance with the pertinent requirements.

Subpart C—Post-award Requirements
Financial and Program Management
§ 435.20 Purpose of financial and program management
gulation on an annual basis, if the recipients have ongoing and continuing relationships with the agency. Annual certifications and representations must be signed by responsible officials with the authority to ensure recipients' compliance with the pertinent requirements.

Subpart C—Post-award Requirements
Financial and Program Management
§ 435.20 Purpose of financial and program management. Sections 435.21 through 435.28 prescribe standards for financial management systems, methods for making payments and rules for: satisfying cost sharing and matching requirements, accounting for program

§ 435.21 Standards for financial management systems. (a) Introduction. SSA requires recipients to relate financial data to performance data and develop unit cost information whenever practical.
(b) Basic requirements. Recipients' financial management systems must provide for the following:
(1) Accurate, current and complete disclosure of the financial results of each federally-sponsored project or program in accordance with the reporting requirements set forth in § 435.52. If SSA requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient will not be required to establish an accrual accounting system. These recipients may develop such accrual data for its reports on the basis of an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of funds for federally-sponsored activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds, property and other assets. Recipients must adequately safeguard all such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever appropriate, financial information should be related to performance and unit cost data.
assets, outlays, income and interest.
(3) Effective control over and accountability for all funds, property and other assets. Recipients must adequately safeguard all such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever appropriate, financial information should be related to performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the transfer of funds to the recipient from the U.S. Treasury and the issuance or redemption of checks, warrants or payments by other means for program purposes by the recipient. To the extent that the provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453; 31 U.S.C. 6501) govern, payment methods of State agencies, instrumentalities, and fiscal agents must be consistent with CMIA Treasury-State Agreements or the CMIA default procedures codified at 31 CFR part 205, “Withdrawal of Cash from the Treasury for Advances under Federal Grant and Other Programs.”
(6) Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award.
(7) Accounting records including cost accounting records that are supported by source documentation.
(c) Bonding and insurance requirements. Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, SSA, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the Federal Government.
(d) Fidelity bond coverage requirements. SSA may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.
the recipient, SSA, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the Federal Government.
(d) Fidelity bond coverage requirements. SSA may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.
(e) Obtaining bonds. Where bonds are required in the situations described above, the bonds must be obtained from companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR part 223, “Surety Companies Doing Business with the United States.”

§ 435.22 Payment. (a) Introduction. Payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients. Payment methods of State agencies or instrumentalities must be consistent with Treasury-State CMIA agreements or default procedures codified at 31 CFR part 205.
(b) Advance payment method and requirements. (1) Recipients will be paid in advance, provided they maintain or demonstrate the willingness to maintain:
(i) Written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and
(ii) Financial management systems that meet the standards for fund control and accountability as established in § 435.21.
(2) Cash advances to a recipient organization will be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project. The timing and amount of cash advances must be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs.
be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project. The timing and amount of cash advances must be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs.
(c) Advance payment consolidation and mechanisms. Whenever possible, advances must be consolidated to cover anticipated cash needs for all awards made by SSA to the recipient.
(1) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients are authorized to submit requests for advances and reimbursements at least monthly when electronic fund transfers are not used.
(d) How to request advance payment. Requests for Treasury check advance payment must be submitted on SF-270, “Request for Advance or Reimbursement,” or other forms as may be authorized by OMB. This form is not to be used when Treasury check advance payments are made to the recipient automatically through the use of a predetermined payment schedule or if precluded by special SSA instructions for electronic funds transfer.
(e) Reimbursement method. Reimbursement is the preferred method when the advance payment requirements in paragraph (b) of this section cannot be met. SSA may also use this method on any construction agreement, or if the major portion of the construction project is accomplished through private market financing or Federal loans, and the Federal assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, SSA will make payment within 30 days after receipt of the billing, unless the billing is improper.
(2) Recipients will be authorized to submit request for reimbursement at least monthly when electronic funds transfers are not used.
hrough private market financing or Federal loans, and the Federal assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, SSA will make payment within 30 days after receipt of the billing, unless the billing is improper.
(2) Recipients will be authorized to submit request for reimbursement at least monthly when electronic funds transfers are not used.
(f) Working capital advance method. If a recipient cannot meet the criteria for advance payments and SSA has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, SSA may provide cash on a working capital advance basis. Under this procedure, SSA will advance cash to the recipient to cover its estimated disbursement needs for an initial period generally geared to the awardee's disbursing cycle. Thereafter, SSA will reimburse the recipient for its actual cash disbursements. The working capital advance method of payment will not be used for recipients unwilling or unable to provide timely advances to their subrecipient to meet the subrecipient's actual cash disbursements.
(g) Requesting additional cash payments. To the extent available, recipients must disburse funds available
(h) Withholding of payments. Unless otherwise required by statute, SSA will not withhold payments for proper charges made by recipients at any time during the project period unless paragraph (h) (1) or (2) of this section apply.
(1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or Federal reporting requirements.
(2) The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129, “Managing Federal Credit Programs.” Under such conditions, SSA may, upon reasonable notice, inform the recipient that payments will not be made for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.
2) The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129, “Managing Federal Credit Programs.” Under such conditions, SSA may, upon reasonable notice, inform the recipient that payments will not be made for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as depositories of funds advanced under awards. (1) Except for situations described in paragraph (i)(2) of this section, SSA will not require separate depository accounts for funds provided to a recipient or establish any eligibility requirements for depositories for funds provided to a recipient. However, recipients must be able to account for the receipt, obligation and expenditure of funds.
(2) Advances of Federal funds must be deposited and maintained in insured accounts whenever possible.
(j) Use of women-owned and minority-owned banks. Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises, recipients will be encouraged to use women-owned and minority-owned banks (a bank which is owned at least 50 percent by women or minority group members).
(k) Use of interest bearing accounts. Recipients must maintain advances of Federal funds in interest bearing accounts, unless paragraph (k) (1), (2) or (3) of this section apply.
(1) The recipient receives less than $120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances.
(3) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.
apply.
(1) The recipient receives less than $120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances.
(3) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.
(l) Remittance of interest earned. For those entities where CMIA and its implementing regulations do not apply, interest earned on Federal advances deposited in interest bearing accounts must be remitted annually to Department of Health and Human Services, Payment Management System, Rockville, MD 20852. Interest amounts up to $250 per year may be retained by the recipient for administrative expense. State universities and hospitals must comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses its own funds to pay pre-award costs for discretionary awards without prior written approval from SSA, it waives its right to recover the interest under CMIA.
(m) Forms for requesting advances and reimbursements. Except as noted elsewhere in this Part, only the following forms are authorized for the recipients in requesting advances and reimbursements. SSA will not require more than an original and two copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. SSA has adopted the SF-270 as a standard form for all nonconstruction programs when electronic funds transfer or predetermined advance methods are not used. SSA, however, has the option of using this form for construction programs in lieu of the SF-271, “Outlay Report and Request for Reimbursement for Construction Programs.”
pies of these forms.
(1) SF-270, Request for Advance or Reimbursement. SSA has adopted the SF-270 as a standard form for all nonconstruction programs when electronic funds transfer or predetermined advance methods are not used. SSA, however, has the option of using this form for construction programs in lieu of the SF-271, “Outlay Report and Request for Reimbursement for Construction Programs.”
(2) SF-271, Outlay Report and Request for Reimbursement for Construction Programs. SSA has adopted the SF-271 as the standard form to be used for requesting reimbursement for construction programs. However, SSA may substitute the SF-270 when SSA determines that it provides adequate information to meet Federal needs.

§ 435.23 Cost sharing or matching. (a) All contributions, including cash and third party in-kind, will be accepted as part of the recipient's cost sharing or matching when such contributions meet all of the following criteria:
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-assisted project or program.
(3) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
(6) Are provided for in the approved budget when required by SSA.
(7) Conform to other provisions of this Part, as applicable.
(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of SSA.
5) Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
(6) Are provided for in the approved budget when required by SSA.
(7) Conform to other provisions of this Part, as applicable.
(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of SSA.
(c) Values for recipient contributions of services and property will be established in accordance with the applicable cost principles. If SSA authorizes recipients to donate buildings or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching will be the lesser of paragraph (c)(1) or (2) of this section.
(1) The certified value of the remaining life of the property recorded in the recipient's accounting records at the time of donation.
(2) The current fair market value. However, when there is sufficient justification, SSA may approve the use of the current fair market value of the donated property, even if it exceeds the certified value at the time of donation to the project.
(d) Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. Rates for volunteer services must be consistent with those paid for similar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization, rates must be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.
imilar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization, rates must be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.
(e) When an employer other than the recipient furnishes the services of an employee, these services must be valued at the employee's regular rate of pay (plus an amount of fringe benefits that are reasonable, allowable, and allocable, but exclusive of overhead costs), provided these services are in the same skill for which the employee is normally paid.
(f) Donated supplies may include such items as expendable equipment, office supplies, laboratory supplies or workshop and classroom supplies. Value assessed to donated supplies included in the cost sharing or matching
(g) The method used for determining cost sharing or matching for donated equipment, buildings and land for which title passes to the recipient may differ according to the purpose of the award, if paragraph (g)(1) or (2) of this section apply.
(1) If the purpose of the award is to assist the recipient in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities that require the use of equipment, buildings or land, normally only depreciation or use charges for equipment and buildings may be made. However, the full value of equipment or other capital assets and fair rental charges for land may be allowed, provided that SSA has approved the charges.
perty may be claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities that require the use of equipment, buildings or land, normally only depreciation or use charges for equipment and buildings may be made. However, the full value of equipment or other capital assets and fair rental charges for land may be allowed, provided that SSA has approved the charges.
(h) The value of donated property must be determined in accordance with the usual accounting policies of the recipient, with the following qualifications:
(1) The value of donated land and buildings may not exceed its fair market value at the time of donation to the recipient as established by an independent appraiser (e.g., certified real property appraiser or General Services Administration representative) and certified by a responsible official of the recipient.
(2) The value of donated equipment may not exceed the fair market value of equipment of the same age and condition at the time of donation.
(3) The value of donated space may not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.
(4) The value of loaned equipment may not exceed its fair rental value.
(5) The following requirements pertain to the recipient's supporting records for in-kind contributions from third parties:
(i) Volunteer services must be documented and, to the extent feasible, supported by the same methods used by the recipient for its own employees.
(ii) The basis for determining the valuation for personal service, material, equipment, buildings and land must be documented.

§ 435.24 Program income. (a) Introduction. SSA will apply the standards set forth in this section in requiring recipient organizations to account for program income related to projects financed in whole or in part with Federal funds.
recipient for its own employees.
(ii) The basis for determining the valuation for personal service, material, equipment, buildings and land must be documented.

§ 435.24 Program income. (a) Introduction. SSA will apply the standards set forth in this section in requiring recipient organizations to account for program income related to projects financed in whole or in part with Federal funds.
(b) Use of program income. Except as provided in paragraph (h) of this section, program income earned during the project period must be retained by the recipient and, in accordance with SSA regulations or the terms and conditions of the award, must be used in one or more of the following ways. Program income must be:
(1) Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based.
(c) Use of excess program income. When an agency authorizes the disposition of program income as described in paragraph (b)(1) or (b)(2) of this section, program income in excess of any limits stipulated must be used in accordance with paragraph (b)(3) of this section.
(d) When the use of program income is not specified. In the event that SSA does not specify in its regulations or the terms and conditions of the award how program income is to be used, paragraph (b)(3) of this section will apply automatically to all projects or programs except research. For awards that support research, paragraph (b)(1) of this section will apply automatically unless SSA indicates in the terms and conditions another alternative on the award or the recipient is subject to special award conditions, as indicated in § 435.14.
award how program income is to be used, paragraph (b)(3) of this section will apply automatically to all projects or programs except research. For awards that support research, paragraph (b)(1) of this section will apply automatically unless SSA indicates in the terms and conditions another alternative on the award or the recipient is subject to special award conditions, as indicated in § 435.14.
(e) Program income earned after end of project period. Unless SSA regulations or the terms and conditions of the award provide otherwise, recipients will have no obligation to the Federal Government regarding program income earned after the end of the project period.
(f) Costs incident to generation of program income. If authorized by SSA regulations or the terms and conditions of the award, costs incident to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the award.
(g) Proceeds from sale of property. Proceeds from the sale of property must be handled in accordance with the requirements of the Property Standards (See §§ 435.30 through 435.37).
(h) Program income from license fees and royalties. Unless SSA regulations or the terms and condition of the award provide otherwise, recipients have no obligation to the Federal Government with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply to inventions made under an experimental, developmental, or research award.

§ 435.25 Revision of budget and program plans. (a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share, depending upon SSA requirements. It must be related to performance for program evaluation purposes whenever appropriate.
velopmental, or research award.

§ 435.25 Revision of budget and program plans. (a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share, depending upon SSA requirements. It must be related to performance for program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions, in accordance with this section.
(c) For nonconstruction awards, recipients must request prior approvals from SSA for one or more of the following program or budget related reasons:
(1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
(2) Change in a key person specified in the application or award document.
(3) The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by SSA.
(6) The inclusion, unless waived by SSA, of costs that require prior approval in accordance with OMB Circular A-21, “Cost Principles for Educational Institutions,” OMB Circular A-122, “Cost Principles for Non-Profit Organizations,” or 45 CFR part 74 Appendix E, “Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals,” or 48 CFR part 31, “Contract Cost Principles and Procedures,” as applicable.
(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved awards, the subaward, transfer or
ermining Costs Applicable to Research and Development under Grants and Contracts with Hospitals,” or 48 CFR part 31, “Contract Cost Principles and Procedures,” as applicable.
(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved awards, the subaward, transfer or
(d) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, SSA may waive cost-related and administrative prior written approvals required by this Part and OMB Circulars A-21 and A-122. Such waivers may include authorizing recipients to do any one or more of the following:
(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior approval of SSA. All pre-award costs are incurred at the recipient's risk (i.e., SSA is under no obligation to reimburse such costs if for any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover such costs).
(2) Initiate a one-time extension of the expiration date of the award of up to 12 months unless one or more of the following conditions apply. For one-time extensions, the recipient must notify SSA in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award. This one-time extension may not be exercised merely for the purpose of using unobligated balances.
n of the expiration date of the award of up to 12 months unless one or more of the following conditions apply. For one-time extensions, the recipient must notify SSA in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award. This one-time extension may not be exercised merely for the purpose of using unobligated balances.
(i) The terms and conditions of award prohibit the extension.
(ii) The extension requires additional Federal funds.
(iii) The extension involves any change in the approved objectives or scope of the project.
(3) Carry forward unobligated balances to subsequent funding periods.
(4) For awards that support research, unless SSA provides otherwise in the award or in the SSA regulations, the prior approval requirements described in paragraph (e) of this section are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e)(2) of this section applies.
(f) SSA may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for awards in which the Federal share of the project exceeds $100,000 and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by SSA. No transfers are permitted that would cause any Federal appropriation or part thereof to be used for purposes other than those consistent with the original intent of the appropriation.
(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section, do not require prior approval.
o exceed 10 percent of the total budget as last approved by SSA. No transfers are permitted that would cause any Federal appropriation or part thereof to be used for purposes other than those consistent with the original intent of the appropriation.
(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section, do not require prior approval.
(h) For construction awards, recipients must request prior written approval promptly from SSA for budget revisions whenever paragraph (h)(1), (2) or (3) of this section apply.
(1) The revision results from changes in the scope or the objective of the project or program.
(2) The need arises for additional Federal funds to complete the project.
(3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed consistent with applicable OMB cost principles listed in § 435.27.
(i) No other prior approval requirements for specific items will be imposed unless a deviation has been approved by OMB.
(j) When SSA makes an award that provides support for both construction and nonconstruction work, SSA may require the recipient to request prior approval before making any fund or budget transfers between the two types of work supported.
(k) For both construction and nonconstruction awards, recipients must notify SSA in writing promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the recipient for the project period by more than $5000 or five percent of the Federal award, whichever is greater. This notification is not required if an application for additional funding is submitted for a continuation award.
(l) When requesting approval for budget revisions, recipients must use the budget forms that were used in the application unless SSA indicates a letter of request suffices.
ecipient for the project period by more than $5000 or five percent of the Federal award, whichever is greater. This notification is not required if an application for additional funding is submitted for a continuation award.
(l) When requesting approval for budget revisions, recipients must use the budget forms that were used in the application unless SSA indicates a letter of request suffices.
(m) Within 30 calendar days from the date of receipt of the request for budget revisions, SSA will review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, SSA will inform the recipient in writing of the date when the recipient may expect the decision.

§ 435.26 Non-Federal audits. (a) Recipients and subrecipients that are institutions of higher education or other non-profit organizations (including hospitals) are subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.”
(b) State and local governments are subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.”
(c) For-profit hospitals not covered by the audit provisions of revised OMB Circular A-133 are subject to the audit requirements of SSA.
(d) Commercial organizations are subject to the audit requirements of SSA or the prime recipient as incorporated into the award document.

§ 435.27 Allowable costs. For each kind of recipient, there is a set of Federal principles for determining allowable costs. Allowability of costs will be determined in accordance with the cost principles applicable to the entity incurring the costs. Thus:
(d) Commercial organizations are subject to the audit requirements of SSA or the prime recipient as incorporated into the award document.

§ 435.27 Allowable costs. For each kind of recipient, there is a set of Federal principles for determining allowable costs. Allowability of costs will be determined in accordance with the cost principles applicable to the entity incurring the costs. Thus:
(a) Allowability of costs incurred by State, local or federally-recognized Indian tribal governments is determined in accordance with the provisions of OMB Circular A-87, “Cost Principles for State, Local, and Indian Tribal Governments.”
(b) Allowability of costs incurred by non-profit organizations is determined in accordance with the provisions of OMB Circular A-122, “Cost Principles for Non-Profit Organizations.”
(c) Allowability of costs incurred by institutions of higher education is determined in accordance with the provisions of OMB Circular A-21, “Cost Principles for Educational Institutions.”
(d) Allowability of costs incurred by hospitals is determined in accordance with the provisions of Appendix E of 45 CFR part 74, “Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals.”
(e) Allowability of costs incurred by commercial organizations and those non-profit organizations listed in Attachment C to Circular A-122 is determined in accordance with the provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.

§ 435.28 Period of availability of funds. Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by SSA.
Property Standards

§ 435.30 Purpose of property standards. Sections 435.31 through 435.37 set forth uniform standards governing management and disposition of property furnished by the Federal Government whose cost was charged to a project supported by a Federal award
only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by SSA.
Property Standards

§ 435.30 Purpose of property standards. Sections 435.31 through 435.37 set forth uniform standards governing management and disposition of property furnished by the Federal Government whose cost was charged to a project supported by a Federal award. Recipients must observe these standards under awards and SSA may not impose additional requirements, unless specifically required by Federal statute. The recipient may use its own property management standards and procedures provided it observes the provisions of §§ 435.31 through 435.37.

§ 435.31 Insurance coverage. Recipients must, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with Federal funds as provided to property owned by the recipient. Federally-owned property need not be insured unless required by the terms and conditions of the award.

§ 435.32 Real property. SSA will prescribe requirements for recipients concerning the use and disposition of real property acquired in whole or in part under awards. Unless otherwise provided by statute, such requirements, at a minimum, will contain the following.
(a) Title. Title to real property will vest in the recipient subject to the condition that the recipient will use the real property for the authorized purpose of the project as long as it is needed and will not encumber the property without approval of SSA.
(b) Use in other projects. The recipient must obtain written approval by SSA for the use of real property in other federally-sponsored projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects is limited to those under federally-sponsored projects (i.e., awards) or programs that have purposes consistent with those authorized for support by SSA.
e recipient must obtain written approval by SSA for the use of real property in other federally-sponsored projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects is limited to those under federally-sponsored projects (i.e., awards) or programs that have purposes consistent with those authorized for support by SSA.
(c) Disposition. When the real property is no longer needed as provided in paragraphs (a) and (b) of this section, the recipient must request disposition instructions from SSA or its successor Federal awarding agency. SSA will observe one or more of the following disposition instructions:
(1) The recipient may be permitted to retain title without further obligation to the Federal Government after it compensates the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under guidelines provided by SSA and pay the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures will be established that provide for competition to the extent practicable and result in the highest possible return.
ir market value of the property attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures will be established that provide for competition to the extent practicable and result in the highest possible return.
(3) The recipient may be directed to transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the recipient will be entitled to compensation for its attributable percentage of the current fair market value of the property.

§ 435.33 Federally-owned and exempt property. (a) Federally-owned property. (1) Title to federally-owned property remains vested in the Federal Government. Recipients must submit annually an inventory listing of federally-owned property in their custody to SSA. Upon completion of the award or when the property is no longer needed, the recipient must report the property to SSA for further Federal agency utilization.
(2) If SSA has no further need for the property, it will be declared excess and reported to the General Services Administration, unless SSA has statutory authority to dispose of the property by alternative methods ( e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research equipment to educational and non-profit organizations in accordance with Executive Order 12821, “Improving Mathematics and Science Education in Support of the National Education Goals” (3 CFR, 1992 Comp., p. 323). Appropriate instructions will be issued to the recipient by SSA.
ve methods ( e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research equipment to educational and non-profit organizations in accordance with Executive Order 12821, “Improving Mathematics and Science Education in Support of the National Education Goals” (3 CFR, 1992 Comp., p. 323). Appropriate instructions will be issued to the recipient by SSA.
(b) Exempt property. When statutory authority exists, SSA has the option to vest title to property acquired with Federal funds in the recipient without further obligation to the Federal Government and under conditions SSA considers appropriate. Such property is “exempt property.” Should SSA not establish conditions, title to exempt property upon acquisition will vest in the recipient without further obligation to the Federal Government.

§ 435.34 Equipment. (a) Title to equipment acquired by a recipient with Federal funds will vest in the recipient, subject to conditions of this section.
(b) The recipient may not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment.
(c) The recipient may use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and may not encumber the property without approval of SSA. When no longer needed for the original project or program, the recipient must use the equipment in connection with its other federally-sponsored activities, in the following order of priority:
(1) Activities sponsored by SSA, then
(2) activities sponsored by other Federal awarding agencies.
m continues to be supported by Federal funds and may not encumber the property without approval of SSA. When no longer needed for the original project or program, the recipient must use the equipment in connection with its other federally-sponsored activities, in the following order of priority:
(1) Activities sponsored by SSA, then
(2) activities sponsored by other Federal awarding agencies.
(d) During the time that equipment is used on the project or program for which it was acquired, the recipient must make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for such other use must be given to other projects or programs sponsored by SSA; second preference must be given to projects or programs sponsored by other Federal awarding agencies. If the equipment is owned by the Federal Government, use on other activities not sponsored by the Federal Government will be permissible if authorized by SSA. User charges will be treated as program income.
(e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of SSA.
(f) The recipient's property management standards for equipment acquired with Federal funds and federally-owned equipment must include all of the following:
(1) Equipment records must be maintained accurately and must include the following information:
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
ng:
(1) Equipment records must be maintained accurately and must include the following information:
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of Federal participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the Federal awarding agency for its share.
(2) Equipment owned by the Federal Government must be identified to indicate Federal ownership.
(3) A physical inventory of equipment must be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records must be investigated to determine the causes of the difference. The recipient must, in connection with the inventory, verify the existence, current utilization, and continued need for the equipment.
(4) A control system must be in effect to insure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment must be investigated and fully documented; if the equipment was owned by the Federal Government, the recipient must promptly notify SSA.
(5) Adequate maintenance procedures must be implemented to keep the equipment in good condition.
(4) A control system must be in effect to insure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment must be investigated and fully documented; if the equipment was owned by the Federal Government, the recipient must promptly notify SSA.
(5) Adequate maintenance procedures must be implemented to keep the equipment in good condition.
(6) Where the recipient is authorized or required to sell the equipment, proper sales procedures must be established which provide for competition to the extent practicable and result in the highest possible return.
(g) When the recipient no longer needs the equipment, the equipment may be used for other activities in accordance with the following standards. For equipment with a current per unit fair market value of $5000 or more, the recipient may retain the equipment for other uses provided that compensation is made to SSA or its successor. The amount of compensation will be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the equipment. If the recipient has no need for the equipment, the recipient must request disposition instructions from SSA. SSA will determine whether the equipment can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the equipment will be reported to the General Services Administration by SSA to determine whether a requirement for the equipment exists in other Federal agencies. SSA will issue instructions to the recipient no later than 120 calendar days after the recipient's request and the following procedures will govern:
gency's requirements. If no requirement exists within that agency, the availability of the equipment will be reported to the General Services Administration by SSA to determine whether a requirement for the equipment exists in other Federal agencies. SSA will issue instructions to the recipient no later than 120 calendar days after the recipient's request and the following procedures will govern:
(1) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient's request, the recipient must sell the equipment and reimburse SSA an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the recipient is permitted to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for the recipient's selling and handling expenses.
(2) If the recipient is instructed to ship the equipment elsewhere, the recipient will be reimbursed by the Federal Government by an amount which is computed by applying the percentage of the recipient's participation in the cost of the original project or program to the current fair market value of the equipment, plus any reasonable shipping or interim storage costs incurred.
(3) If the recipient is instructed to otherwise dispose of the equipment, the recipient will be reimbursed by SSA for such costs incurred in its disposition.
(4) SSA may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such a transfer will be subject to the following standards:
t is instructed to otherwise dispose of the equipment, the recipient will be reimbursed by SSA for such costs incurred in its disposition.
(4) SSA may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such a transfer will be subject to the following standards:
(i) The equipment must be appropriately identified in the award or otherwise made known to the recipient in writing.
(ii) SSA must issue disposition instructions within 120 calendar days after receipt of a final inventory. The final inventory must list all equipment acquired with grant funds and federally-owned equipment. If SSA fails to issue disposition instructions within the 120 calendar day period, the recipient must apply the standards of this section, as appropriate.
(iii) When SSA exercises its right to take title, the equipment will be subject to the provisions for federally-owned equipment.

§ 435.35 Supplies and other expendable property. (a) Title to supplies and other expendable property will vest in the recipient upon acquisition. If there is a residual inventory of unused supplies exceeding $5000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other federally-sponsored project or program, the recipient may retain the supplies for use on non-Federal sponsored activities or sell them, but must, in either case, compensate the Federal Government for its share. The amount of compensation will be computed in the same manner as for equipment.
alue upon termination or completion of the project or program and the supplies are not needed for any other federally-sponsored project or program, the recipient may retain the supplies for use on non-Federal sponsored activities or sell them, but must, in either case, compensate the Federal Government for its share. The amount of compensation will be computed in the same manner as for equipment.
(b) The recipient may not use supplies acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute as long as the Federal Government retains an interest in the supplies.

§ 435.36 Intangible property. (a) Copyright. The recipient may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under an award. SSA reserves a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes, and to authorize others to do so.
(b) Patents and inventions. Recipients are subject to applicable regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements.”
(c) Rights of Federal Government. 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.
ons Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements.”
(c) Rights of Federal Government. 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) FOIA requests for research data. (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, SSA 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
(2) The following definitions apply for purposes of this paragraph (d):
(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.
mation, 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.
(e) Title to intangible property and debt instruments. Title to intangible property and debt instruments acquired under an award or subaward vests upon acquisition in the recipient. The recipient must use that property for the originally-authorized purpose, and the recipient may not encumber the property without approval of SSA. When no longer needed for the originally authorized purpose, disposition of the intangible property will occur in accordance with the provisions of § 435.34(g).

§ 435.37 Property trust relationship. Real property, equipment, intangible property and debt instruments that are acquired or improved with Federal funds must be held in trust by the recipient as trustee for the beneficiaries of the project or program under which the property was acquired or improved. Agencies may require recipients to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds and that use and disposition conditions apply to the property
eral funds must be held in trust by the recipient as trustee for the beneficiaries of the project or program under which the property was acquired or improved. Agencies may require recipients to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds and that use and disposition conditions apply to the property.
Procurement Standards

§ 435.40 Purpose of procurement standards. Sections 435.41 through 435.48 set forth standards for use by recipients in establishing procedures for the procurement of supplies and other expendable property, equipment, real property and other services with Federal funds. These standards are furnished to ensure that such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal statutes and executive orders. No additional procurement standards or requirements may be imposed by SSA upon recipients, unless specifically required by Federal statute or executive order or approved by OMB.

§ 435.41 Recipient responsibilities. The standards contained in this section do not relieve the recipient of the contractual responsibilities arising under its contract(s). The recipient is the responsible authority, without recourse to SSA, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of an award or other agreement. This includes disputes, claims, protests of award, source evaluation or other matters of a contractual nature. Matters concerning violation of statute are to be referred to such Federal, State or local authority as may have proper jurisdiction.

§ 435.42 Codes of conduct. The recipient must maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts
ms, protests of award, source evaluation or other matters of a contractual nature. Matters concerning violation of statute are to be referred to such Federal, State or local authority as may have proper jurisdiction.

§ 435.42 Codes of conduct. The recipient must maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient.

§ 435.43 Competition. All procurement transactions must be conducted in a manner to provide, to the maximum extent practical, open and free competition. The recipient must be alert to organizational conflicts of interest as well as noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals must be excluded from competing for such procurements
noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals must be excluded from competing for such procurements. Awards must be made to the bidder or offeror whose bid or offer is responsive to the solicitation and is most advantageous to the recipient, price, quality and other factors considered. Solicitations must clearly set forth all requirements that the bidder or offeror must fulfill in order for the bid or offer to be evaluated by the recipient. Any and all bids or offers may be rejected when it is in the recipient's interest to do so.

§ 435.44 Procurement procedures. (a) All recipients must establish written procurement procedures. These procedures must provide for, at a minimum, that paragraphs (a) (1), (2), and (3) of this section apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal Government.
(3) Solicitations for goods and services provide for all of the following:
(i) A clear and accurate description of the technical requirements for the material, product or service to be procured. In competitive procurements, such a description may not contain
(ii) Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.
(iv) The specific features of “brand name or equal” descriptions that bidders are required to meet when such items are included in the solicitation.
n evaluating bids or proposals.
(iii) A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.
(iv) The specific features of “brand name or equal” descriptions that bidders are required to meet when such items are included in the solicitation.
(v) The acceptance, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement.
(vi) Preference, to the extent practicable and economically feasible, for products and services that conserve natural resources and protect the environment and are energy efficient.
(b) Positive efforts must be made by recipients to utilize small businesses, minority-owned firms, and women's business enterprises, whenever possible. Recipients of Federal awards must take all of the following steps to further this goal:
(1) Ensure that small businesses, minority-owned firms, and women's business enterprises are used to the fullest extent practicable.
(2) Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women's business enterprises.
(3) Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses, minority-owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce's Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women's business enterprises.
omen's business enterprises when a contract is too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce's Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women's business enterprises.
(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders, and incentive contracts) may be determined by the recipient but must be appropriate for the particular procurement and for promoting the best interest of the program or project involved. The “cost-plus-a-percentage-of-cost” or “percentage of construction cost” methods of contracting may not be used.
(d) Contracts may be made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of the proposed procurement. Consideration must be given to such matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources. In certain circumstances, contracts with certain parties are restricted by agencies' implementation of Executive Orders 12549 and 12689, “Debarment and Suspension” (3 CFR, 1986 Comp., p. 189 and 3 CFR, 1989 Comp., p. 235).
(e) Recipients must, on request, make available for SSA, pre-award review and procurement documents, such as request for proposals or invitations for bids, independent cost estimates, etc., when any of the following conditions apply:
(1) A recipient's procurement procedures or operation fails to comply with the procurement standards in this Part.
(2) The procurement is expected to exceed the simplified acquisition threshold fixed at 41 U.S.C. 403 (11) (currently $100,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation.
when any of the following conditions apply:
(1) A recipient's procurement procedures or operation fails to comply with the procurement standards in this Part.
(2) The procurement is expected to exceed the simplified acquisition threshold fixed at 41 U.S.C. 403 (11) (currently $100,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation.
(3) The procurement, which is expected to exceed the simplified acquisition threshold, specifies a “brand name” product.
(4) The proposed award over the simplified acquisition threshold is to be awarded to other than the apparent low bidder under a sealed bid procurement.
(5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the amount of the simplified acquisition threshold.

§ 435.45 Cost and price analysis. Some form of cost or price analysis must be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and allowability.

§ 435.46 Procurement records. Procurement records and files for purchases in excess of the simplified acquisition threshold must include the following at a minimum:
(a) Basis for contractor selection,
(b) Justification for lack of competition when competitive bids or offers are not obtained, and
evaluation of each element of cost to determine reasonableness, allocability and allowability.

§ 435.46 Procurement records. Procurement records and files for purchases in excess of the simplified acquisition threshold must include the following at a minimum:
(a) Basis for contractor selection,
(b) Justification for lack of competition when competitive bids or offers are not obtained, and
(c) Basis for award cost or price.

§ 435.47 Contract administration. A system for contract administration must be maintained to ensure contractor conformance with the terms, conditions and specifications of the contract and to ensure adequate and timely follow up of all purchases. Recipients must evaluate contractor performance and document, as appropriate, whether contractors have met the terms, conditions and specifications of the contract.

§ 435.48 Contract provisions. The recipient must include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. The following provisions must also be applied to subcontracts:
(a) Contracts in excess of the simplified acquisition threshold must contain contractual provisions or conditions that allow for administrative, contractual, or legal remedies in instances in which a contractor violates or breaches the contract terms, and provide for such remedial actions as may be appropriate.
(b) All contracts in excess of the simplified acquisition threshold must contain suitable provisions for termination by the recipient, including the manner by which termination will be effected and the basis for settlement. In addition, such contracts must describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.
ion threshold must contain suitable provisions for termination by the recipient, including the manner by which termination will be effected and the basis for settlement. In addition, such contracts must describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.
(c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting) for construction or facility improvements must provide for the recipient to follow its own requirements relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract exceeds $100,000. For those contracts or subcontracts exceeding $100,000, SSA may accept the bonding policy and requirements of the recipient, provided SSA has made a determination that the Federal Government's interest is adequately protected. If such a determination has not been made, the minimum requirements are as follows:
(1) A bid guarantee from each bidder equivalent to five percent of the bid
(2) A performance bond on the part of the contractor for 100 percent of the contract price. A “performance bond” is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of the contract price. A “payment bond” is one executed in connection with a contract to assure payment as required by statute of all persons supplying labor and material in the execution of the work provided for in the contract.
(4) Where bonds are required in the situations described herein, the bonds must be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part 223, “Surety Companies Doing Business with the United States.”
ct to assure payment as required by statute of all persons supplying labor and material in the execution of the work provided for in the contract.
(4) Where bonds are required in the situations described herein, the bonds must be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part 223, “Surety Companies Doing Business with the United States.”
(d) All negotiated contracts (except those for less than the simplified acquisition threshold) awarded by recipients must include a provision to the effect that the recipient, SSA, the Comptroller General of the United States, or any of their duly authorized representatives, will have access to any books, documents, papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.
(e) All contracts, including small purchases, awarded by recipients and their contractors must contain the procurement provisions of Appendix A to this Part, as applicable.
Reports and Records

§ 435.50 Purpose of reports and records. Sections 435.51 through 435.53 set forth the procedures for monitoring and reporting on the recipient's financial and program performance and the necessary standard reporting forms. They also set forth record retention requirements.

§ 435.51 Monitoring and reporting program performance. (a) Recipients are responsible for managing and monitoring each project, program, subaward, function or activity supported by the award. Recipients must monitor subawards to ensure subrecipients have met the audit requirements as delineated in § 435.26.
necessary standard reporting forms. They also set forth record retention requirements.

§ 435.51 Monitoring and reporting program performance. (a) Recipients are responsible for managing and monitoring each project, program, subaward, function or activity supported by the award. Recipients must monitor subawards to ensure subrecipients have met the audit requirements as delineated in § 435.26.
(b) SSA will prescribe the frequency with which the performance reports must be submitted. Except as provided in paragraph (f) of this section, performance reports will not be required more frequently than quarterly or, less frequently than annually. Annual reports are due 90 calendar days after the grant year; quarterly or semi-annual reports are due 30 days after the repor

[Text truncated at 120,000 characters. The full text is on the page linked above.]

## Nearby sections

- [65 FR 78 Fees for Rice Inspection](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_99-33931.md)
- [65 FR 250 Airworthiness Directives; Boeing Model 777 Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-50.md)
- [65 FR 270 Radio Broadcasting Services; Canton and Morristown, NY](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-90.md)
- [65 FR 272 Pacific Halibut Fisheries; Catch Sharing Plan](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-86.md)
- [65 FR 275 Fisheries of the Northeastern United States; Proposed 2000 Fishing Quotas for Atlantic Surf Clams, Ocean Quahogs, and Maine Mahogany Quahogs](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-84.md)
- [65 FR 425 Azoxystrobin; Pesticide Tolerance](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-75.md)
- [65 FR 729 Airworthiness Directives; British Aerospace Jetstream Model 3201 Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-241.md)
- [65 FR 1075 Airworthiness Directives; Cessna Model 750 Citation X Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-377.md)
- [65 FR 1077 Drawbridge Operation Regulations; Merrimack River, MA.](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-351.md)
- [65 FR 1349 Liquidation of Collateral](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-426.md)
- [65 FR 2081 Allocation of Partnership Debt](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-275.md)
- [65 FR 2104 Defense Federal Acquisition Regulation Supplement; Transportation Acquisition Policy](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-768.md)
- [65 FR 2364 Utah Regulatory Program](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-970.md)
- [65 FR 2912 Notice of Intent to Request Public Comments on Guides for the Household Furniture Industry and the Telemarketing Sales Rule](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-993.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FR_PRORULE_00-9399. Check the current official text before relying on it. Not legal advice.