# 67 FR 54850: Financial Assistance Regulations

> Federal · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-20967

## Section

- **Citation:** 67 FR 54850
- **Heading:** Financial Assistance Regulations
- **Jurisdiction:** Federal
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Federal Register / Vol. 67 / 67 FR 54850

## Text

DEPARTMENT OF ENERGY 10 CFR Part 600 RIN 1991-AB57 Financial Assistance Regulations AGENCY:
Department of Energy.

ACTION:
Notice of proposed rulemaking and opportunity for public comment.

SUMMARY:
The Department of Energy (DOE) proposes adding a new subpart to the DOE Assistance Regulations, making minor amendments to existing subparts to reflect this change, and eliminating a section that contains internal procedures for DOE officials or requirements that are contained in other sections. The new subpart would establish new administrative requirements that are specifically tailored for awards to for-profit organizations and eliminate the need to apply existing uniform administrative requirements for awards with institutions of higher education, hospitals, and other nonprofit organizations to awards with for-profit organizations.

DATES:
Written comments must be received by October 25, 2002.

ADDRESSES:
Comments (3 copies) should be addressed to: Trudy Wood, U.S. Department of Energy, Office of Procurement and Assistance Management, ME-61, 1000 Independence Avenue, SW, Washington, DC 20585. If possible, a copy should also be e-mailed to fanotice@pr.doe.gov.
FOR FURTHER INFORMATION CONTACT:
Ms. Trudy Wood, Office of Procurement and Assistance Policy, Department of Energy, at (202) 586-5625.

SUPPLEMENTARY INFORMATION:
I. Background II. Comments and Responses III. Discussion of Rule Provisions IV. Procedural Requirements A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 13211 V. Approval of the Secretary of Energy I
exibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 13211 V. Approval of the Secretary of Energy I. Background
Office of Management and Budget (OMB) Circular A-110 provides standards for the administration of grants and agreements with institutions of higher education, hospitals, and other nonprofit organizations. OMB Circular A-110 also states that “Federal agencies may apply the provisions of this Circular to commercial organizations * * *.” Consistent with this guidance, when DOE implemented the requirements of Circular A-110 in its financial assistance regulations at 10 CFR part 600, subpart B, the Department, as a matter of discretion, also applied the provisions of the Circular to commercial organizations.
DOE has been actively engaged in the Government-wide effort to streamline and simplify the application, administrative, and reporting procedures for Federal financial assistance programs pursuant to Public Law 106-107, Federal Financial Assistance Management Improvement Act of 1999 (“the Act”). As part of its initiative to consult with non-Federal entities, the Department solicited comments and suggestions from the grant community.
In response, DOE received comments from for-profit organizations relating to issues that were unique to DOE and that were not being addressed in the Government-wide effort to implement the Act. In response to these comments, DOE published a notice in the Federal Register on May 8, 2001 (66 FR 23197) requesting comments on whether DOE should initiate a rulemaking that established administrative requirements for financial assistance awards tailored specifically to for-profit organizations. The notice also requested comments on the specific changes proposed
wide effort to implement the Act. In response to these comments, DOE published a notice in the Federal Register on May 8, 2001 (66 FR 23197) requesting comments on whether DOE should initiate a rulemaking that established administrative requirements for financial assistance awards tailored specifically to for-profit organizations. The notice also requested comments on the specific changes proposed. DOE received three sets of comments and questions on the proposed initiative. The respondents strongly endorsed the concept of administrative requirements specifically tailored to for-profit organizations.
Today DOE is proposing to add a new subpart D containing provisions similar to subpart B but that have been tailored specifically for awards to for-profits organizations. If subpart D is promulgated as a final rule, for-profit organizations subject to subpart D would be relieved of obligations that would otherwise apply under subpart B. The provisions of subpart B would continue to apply to institutions of higher education, hospitals, and other nonprofit organizations.
II. Comments and Responses
This section presents a summary of the major comments and explains how DOE addressed the comments in drafting this proposed rule. DOE received one comment concerning intellectual property rights under Cooperative Research and Development Agreements (CRADAs). CRADAs are not financial assistance instruments and are not included in this rulemaking. This comment was provided to the Assistant General Counsel for Technology Transfer and Intellectual Property for his consideration. All other comments were considered in developing this proposed rule.
Comment: The Federal Register notice stated that the new subpart would allow DOE to apply less restrictive requirements to small awards. DOE should define small to include any award yielding less than $1 million a year to an individual company
eral Counsel for Technology Transfer and Intellectual Property for his consideration. All other comments were considered in developing this proposed rule.
Comment: The Federal Register notice stated that the new subpart would allow DOE to apply less restrictive requirements to small awards. DOE should define small to include any award yielding less than $1 million a year to an individual company.
Response: The new subpart does not address less restrictive requirements for small awards, since subpart A, § 600.29, already contains less restrictive requirements for fixed obligation awards, which are small awards that may not exceed $100,000. These requirements apply to both nonprofit and for-profit organizations.
Comment: What is meant by certain minimum standards for financial management systems?
Response: Proposed § 600.311 would provide the minimum standards for financial management systems, which include: (1) Effective control of all funds; (2) accurate, current and complete records that document the source and application of funds; (3) to the extent that advance payments are authorized, procedures that minimize the time elapsing between the transfer of Federal funds to the recipient and the recipient's disbursement of these funds; and (4) a system to support charges for salaries and wages, whether treated as direct or indirect costs.
Comment: The Notice said that DOE would require a recipient that expended $300,000 or more in a year under a Federal award to have an audit. DOE should increase the trigger level for audit to $1 million per year.
Response: We agree that the trigger level should be increased. The proposed § 600.316, paragraph (a), would require that any recipient that expends $500,000 or more in a year under Federal awards have an audit made for that year by an independent auditor. DOE would consider raising the trigger level to $1 million, if comments to the proposed rule provide justification for such an increase.
Comment: Will audit costs be allowable?
Response: Yes
e increased. The proposed § 600.316, paragraph (a), would require that any recipient that expends $500,000 or more in a year under Federal awards have an audit made for that year by an independent auditor. DOE would consider raising the trigger level to $1 million, if comments to the proposed rule provide justification for such an increase.
Comment: Will audit costs be allowable?
Response: Yes. Proposed § 600.316, paragraph (f), states that audit costs (including a reasonable allocation of the costs of the audit of the recipient's
Comment: Will the DOE cost principles remain a requirement?
Response: Yes. Proposed § 600.317 provides for the use of cost principles that are applicable to the type of entity incurring the costs.
Comment: The new subpart should clarify the property standards. Would ISO9000 certification be deemed adequate compliance in property management?
Response: Proposed § 600.323 would contain the requirements for the recipient's property management system. Even if the recipient has an ISO9000 certification, it would have to comply with all the requirements in § 600.323.
Comment: DOE should not eliminate certain Intellectual Property clauses, namely FAR 52.227-1 Authorization and Consent, with its Alternate I, and FAR 52.227-2 Notice of Assistance Regarding Patent and Copyright Infringement. Immunity from a claim of patent infringement actually eliminates a barrier preventing for-profit organizations from participating in the DOE's financial assistance programs.
Response: This proposed rule would eliminate the routine use of these clauses in for-profit and nonprofit research and development (R&D) financial assistance agreements because the work performed by the recipient is undertaken to carry out a public purpose of support or stimulation to an essentially private R&D program rather than to acquire property or services for the direct benefit or use of the Government
is proposed rule would eliminate the routine use of these clauses in for-profit and nonprofit research and development (R&D) financial assistance agreements because the work performed by the recipient is undertaken to carry out a public purpose of support or stimulation to an essentially private R&D program rather than to acquire property or services for the direct benefit or use of the Government. DOE is currently the only agency that routinely includes these FAR clauses in its R&D financial assistance agreements. However, if the circumstances warrant, the proposed rule would permit DOE to determine, on a case-by-case basis, that it would be advantageous to the public and the DOE mission to include these clauses.
Comment: Will the revisions to Rights in Data and Patent Rights provisions eliminate DOE's requirement for both background data and patent rights of commercial organizations? What certain circumstances would prevail for DOE to require recipients to license data or patents to third parties?
Response: Proposed § 600.325 would eliminate DOE's routine use of background data and patent provisions, which could, in very rare, limited circumstances, require a recipient to license its background patents or data to third parties on reasonable terms. DOE would include a provision that may require such third party licensing rights only if it is necessary to provide heightened assurance of commercialization to satisfy the needs of the program.
Comment: What is DOE's intent regarding U.S. competitiveness dealing with substantial manufacturing in the U.S.?
Response: This rule does not change DOE's policy regarding U.S. competitiveness, which is primarily effected through application of the patent waiver regulations contained in 10 CFR part 784.
Comment: DOE should clarify the applicability of “procurement procedures” and define “effective competition techniques.”
Response: Proposed § 600.331 would contain the requirements for procurements
.S.?
Response: This rule does not change DOE's policy regarding U.S. competitiveness, which is primarily effected through application of the patent waiver regulations contained in 10 CFR part 784.
Comment: DOE should clarify the applicability of “procurement procedures” and define “effective competition techniques.”
Response: Proposed § 600.331 would contain the requirements for procurements. Recipients would be obliged to use best commercial practices to ensure reasonable cost. The standard is reasonable cost. Proposed subpart D does not use the term “effective competition techniques.”
III. Discussion of Rule Provisions
Proposed subpart D establishes separate administrative requirements for grants and cooperative agreements with for-profit organizations. In drafting proposed subpart D, DOE reviewed subpart B and tailored its requirements by eliminating those applicable to nonprofit organizations that are not necessary for financial assistance to for-profit organizations. These requirements were not imposed on for-profit organizations by Federal statutes, government-wide regulations, or executive orders and are not required for proper stewardship of Federal funds or accomplishment of DOE mission involving for-profit organizations. Proposed subpart D is similar to the Department of Defense Grant and Agreements Regulations, 32 CFR part 34, Administrative Requirements for Grants and Agreements with For-Profit Organizations.
1. Proposed § 600.302 of subpart D would tailor the definitions in subpart B for the specific requirements of subpart D. In some cases, the terms are defined differently than they are in other parts of the DOE Financial Assistance Rules.
2. Proposed subpart D would simplify the financial and program management requirements as compared to existing requirements under subpart B. These requirements would differ from the subpart B requirements in that they:
a
s in subpart B for the specific requirements of subpart D. In some cases, the terms are defined differently than they are in other parts of the DOE Financial Assistance Rules.
2. Proposed subpart D would simplify the financial and program management requirements as compared to existing requirements under subpart B. These requirements would differ from the subpart B requirements in that they:
a. Encourage recipients to use existing financial management systems established for doing business in the commercial marketplace to the extent that the systems comply with Generally Accepted Accounting Principles (GAAP) and certain minimum standards that are contained in § 600.311;
b. Establish a preference for the reimbursement method of payment (§ 600.312); and
c. Require recipients that expend $500,000 or more in a year under Federal awards to have an audit for that year by an independent auditor (§ 600.316). The audit generally would be made a part of the regularly scheduled, annual audit of the recipient's financial statements. DOE selected the $500,000 threshold because OMB is considering raising the single audit threshold from $300,000 to $500,000. DOE would consider further increasing this threshold up to $1 million if comments received in response to this proposed rule provided adequate justification for such an increase.
3. Proposed subpart D would clarify and simplify the property requirements. The revised property standards would encourage recipients to use existing property management systems to the extent that the systems meet certain minimum standards contained in §§ 600.321 through 600.325.
4. Proposed subpart D would simplify and clarify the patent and data requirements. Proposed § 600.325 would contain the requirements for intellectual property developed or produced under an award with a for-profit organization
uld encourage recipients to use existing property management systems to the extent that the systems meet certain minimum standards contained in §§ 600.321 through 600.325.
4. Proposed subpart D would simplify and clarify the patent and data requirements. Proposed § 600.325 would contain the requirements for intellectual property developed or produced under an award with a for-profit organization. When title to inventions made by recipients under DOE awards would normally vest in the United States, such as arrangements with for-profit organizations other than small business firms, proposed subpart D would maintain the statutorily-based policy that DOE may waive all or any part of the invention rights of the United States. In accordance with the policies and procedures in 10 CFR part 784, virtually all such waiver requests are granted if there is sufficient cost-sharing and agreement on appropriate terms and conditions.
Currently, DOE uses the Federal Acquisition Regulation (FAR) and the Department of Energy Acquisition Regulation (DEAR) patent and data clauses in its financial assistance agreements. These clauses were developed primarily for contracts that provide property or services for the direct benefit or use by the Government. In proposed subpart D, the existing FAR and DEAR patent and data clauses have been tailored specifically for financial assistance awards with for-profit organizations and are contained in Appendix A to subpart D.
Proposed § 600.325 and the standard patent and data provisions in Appendix A would eliminate the following requirements that may be appropriate for contracts, but are not generally needed in financial assistance awards:
a. DOE's routine use of background data and patent provisions that, for example, grant to DOE the right to require recipients, under certain circumstances, to license background data and patents to third parties to assure commercialization (see DEAR 952.227-13(k) and 952.227-14)
owing requirements that may be appropriate for contracts, but are not generally needed in financial assistance awards:
a. DOE's routine use of background data and patent provisions that, for example, grant to DOE the right to require recipients, under certain circumstances, to license background data and patents to third parties to assure commercialization (see DEAR 952.227-13(k) and 952.227-14). DOE would require such third party licensing rights only when it is necessary to provide heightened assurance of commercialization to satisfy the needs of the program.
b. The requirement that the recipient always obtain the Contracting Officer's approval prior to copyrighting computer software developed under the assistance award. DOE would require such prior approval only in special circumstances, for example, when software is a required deliverable under an award. In addition, in order to satisfy DOE programmatic needs, DOE may specify in certain circumstances, such as the human genome project, that copyrighted software developed under DOE sponsorship be treated as “open-source” software. DOE specifically invites public comment on the treatment of copyrighted software as “open-source” software.
c. DOE's routine use of a provision authorizing and consenting to the use of a patented invention in the performance of the award, since the work performed by a recipient is undertaken to carry out a public purpose of support or stimulation to an essentially private research and development program rather than to acquire property or services for the direct benefit or use of the Government. However, if the circumstances warrant, such as awards for research relating to homeland security, DOE may determine, on a case-by-case basis, that it would be advantageous to the public and the DOE mission to include this clause. The public is specifically invited to comment on whether an authorization and consent provision should be included in an assistance award and to provide justification for this recommendation.
5
nces warrant, such as awards for research relating to homeland security, DOE may determine, on a case-by-case basis, that it would be advantageous to the public and the DOE mission to include this clause. The public is specifically invited to comment on whether an authorization and consent provision should be included in an assistance award and to provide justification for this recommendation.
5. Proposed subpart D would significantly reduce requirements imposed on recipient procurement activities. The rule eliminates the existing requirements for codes of conduct, written procurement procedures that provide for certain requirements, and procurement records that would otherwise apply under subpart B. Instead, proposed § 600.331 requires:
a. Recipients' procurement procedures use best commercial practices to ensure reasonable cost for procured goods and services. Recipients are also encouraged to buy commercial items, when practicable.
b. Pre-award review of procurements only in exceptional cases where the contracting officer determines that there is a compelling need to perform such a review and a provision in the award states the requirement.
c. Contracts in excess of the simplified acquisition threshold (currently $100,000) contain certain contractual provisions that allow for administrative, contractual, or legal remedies in instances in which a contractor violates the contract terms.
d. All contracts contain the provisions of Appendix B to subpart D, as applicable. This appendix is similar to Appendix A of subpart B in all substantive aspects.
The following table will assist you in locating and comparing the requirements applicable to for-profit organizations in the existing subpart B and the proposed subpart D.
Existing 10 CFR part 600 subpart B applicable to for-profit organizations Sec. Corresponding proposed 10 CFR part 600 subpart D applicable to for-profit organizations Sec. 600.100 Purpose 600.301 Purpose. 600.101 Definitions 600.302 Definitions
e will assist you in locating and comparing the requirements applicable to for-profit organizations in the existing subpart B and the proposed subpart D.
Existing 10 CFR part 600 subpart B applicable to for-profit organizations Sec. Corresponding proposed 10 CFR part 600 subpart D applicable to for-profit organizations Sec. 600.100 Purpose 600.301 Purpose. 600.101 Definitions 600.302 Definitions. 600.102 Effect on other issuances No corresponding section. 600.103 Deviations 600.303 Deviations. 600.104 Subawards 600.301 Purpose. Pre-Award Requirements 600.110 Purpose No corresponding section. 600.111 Pre-award Policies No corresponding section. 600.112 Forms for applying for Federal assistance No corresponding section. 600.113 Debarment and suspension 600.305 Debarment and suspension. 600.114 Special award/conditions 600.304 Special award conditions. 600.115 Metric system of measurement 600.306 Metric system of measurement. 600.116 Conservation and Recovery Act No corresponding section. 600.117 Certifications and representations No corresponding section. Financial and Program Management Financial and Program Management 600.120 Purpose of financial and program management 600.310 Purpose of financial and program management. 600.121 Standards for financial management systems 600.311 Standards for financial management systems. 600.122 Payment 600.312 Payment. 600.123 Cost sharing or matching 600.313 Cost sharing or matching. 600.124 Program income 600.314 Program income. 600.125 Revision of budget and program plans 600.315 Revision of budget and program plans. 600.126 Non-Federal Audits 600.316 Audits. 600.127 Allowable costs 600.317 Allowable costs and 600.318 Fee and profit. 600.128 Period of availability of funds No corresponding section. Property Standards Property Standards 600.130 Purpose of property standards 600.320 Purpose of property standards. 600.131 Insurance coverage No corresponding section. 600.131 Real property 600.321 Real property and equipment
n-Federal Audits 600.316 Audits. 600.127 Allowable costs 600.317 Allowable costs and 600.318 Fee and profit. 600.128 Period of availability of funds No corresponding section. Property Standards Property Standards 600.130 Purpose of property standards 600.320 Purpose of property standards. 600.131 Insurance coverage No corresponding section. 600.131 Real property 600.321 Real property and equipment. 600.133 Federally-owned and exempt property 600.322 Federally owned property. 600.134 Equipment 600.321 Real property and equipment and 600.323 Property management system. 600.135 Supplies and other expendable property 600.324 Supplies. 600.136 Intangible property 600.325 Intellectual property. 600.137 Property trust relationship No corresponding section. Procurement Standards Procurement Standards 600.140 Purpose of procurement standards 600.330 Purpose of procurement standards. 600.141 Recipient responsibilities 600.331 Requirements. 600.142 Codes of conduct No corresponding section. 600.143 Competition No corresponding section. 600.144 Procurement Procedures 600.331 Requirements. 600.145 Cost and price analysis No corresponding section. 600.146 Procurement records No corresponding section. 600.147 Contract administration No corresponding section. 600.148 Contract provisions 600.331 Requirements. 600.149 Resources Conservation and Recovery Act (RCRA) No corresponding section. Reports and Records Reports and Records 600.150 Purpose of reports and records 600.340 Purpose of reports and records. 600.151 Monitoring and reporting program performance 600.341 Monitoring and reporting program performance and financial performance. 600.152 Financial reporting 600.341 Monitoring and reporting program and financial performance. 600.153 Retention and access requirements for records 600.342 Retention and access requirements for records. Termination and Enforcement Termination and Enforcement 600.160 Purpose of termination and enforcement 600.350 Purpose of termination and enforcement. 600.161 Termination 600.351 Termination
nce. 600.152 Financial reporting 600.341 Monitoring and reporting program and financial performance. 600.153 Retention and access requirements for records 600.342 Retention and access requirements for records. Termination and Enforcement Termination and Enforcement 600.160 Purpose of termination and enforcement 600.350 Purpose of termination and enforcement. 600.161 Termination 600.351 Termination. 600.162 Enforcement 600.352 Enforcement. After-the-Award Requirements After-the-Award Requirements 600.170 Purpose 600.360 Purpose. 600.171 Closeout procedures 600.361 Closeout procedures. 600.172 Subsequent adjustments and continuing responsibilities 600.362 Subsequent adjustments and continuing responsibilities. 600.173 Collection of amounts due 600.363 Collection of amounts due. Additional Provisions Additional Provisions 600.180 Purpose 600.380 Purpose. 600.181 Special provisions for Small Business Innovation Research Grants 600.381 Special provisions for Small Business Innovation Research Grants. APPENDIX A TO SUBPART B TO PART 600—CONTRACT PROVISIONS APPENDIX B TO SUBPART D TO PART 600—CONTRACT PROVISIONS. No corresponding section APPENDIX A TO SUBPART D TO PART 600—PATENT AND DATA RIGHTS PROVISIONS. The proposed rule also would make the following amendments to existing subparts A and B:
1. In § 600.15, we would delete paragraphs (b)(4) and (5) as part of our effort to eliminate unnecessary patent and data requirements in financial assistance awards.
2. Section 600.27 Patent and data provisions would be removed because the provisions are obsolete or contain internal procedures that are more appropriately addressed in internal guidance. Patent and data requirements are contained in the appropriate administrative requirements subpart. References to § 600.27 would also be removed in §§ 600.3, 600.4, and 600.136.
3. In subpart B, we would revise the subpart title to delete “and Commercial Organizations”
ed because the provisions are obsolete or contain internal procedures that are more appropriately addressed in internal guidance. Patent and data requirements are contained in the appropriate administrative requirements subpart. References to § 600.27 would also be removed in §§ 600.3, 600.4, and 600.136.
3. In subpart B, we would revise the subpart title to delete “and Commercial Organizations”. Subpart B would contain requirements applicable only to institutions of higher education, hospitals, and other nonprofit organizations.
4. In § 600.100, we would delete the references to commercial organizations, since administrative requirements for awards with for-profit organizations will be contained in subpart D.
5. In § 600.104, we would delete the reference to commercial organizations and add a new subaward requirement for subrecipients that are for-profit organizations to reflect the new subpart D requirements.
6. In § 600.126, we would revise paragraph (c) to reflect the new audit requirements in subpart D and delete paragraphs (d) and (e).
7. In § 600.127, we would amend paragraph (c) to delete the reference to Small Business Innovation Research (SBIR) recipients, since SBIR recipients are for-profit organizations.
8. In § 600.136 Intangible property, we would revise paragraphs (a) and (e) to delete “that are institutions of higher education, hospitals, and other nonprofit organizations”, delete paragraph (c) (3), and make paragraph (b) read the same as § __.36 in OMB Circular A-110, since this section applies only to institutions of higher education, hospitals, and other nonprofit organizations.
9. Sections 600.180 and 600.181 would be removed from subpart B. Recipients of Small Business Innovation Research grants are for-profit organizations and would be covered by subpart D. Sections 600.180 and 600.181 have been revised to conform to subpart D and today are proposed as §§ 600.380 and 600.381.
IV. Procedural Requirements
A
r education, hospitals, and other nonprofit organizations.
9. Sections 600.180 and 600.181 would be removed from subpart B. Recipients of Small Business Innovation Research grants are for-profit organizations and would be covered by subpart D. Sections 600.180 and 600.181 have been revised to conform to subpart D and today are proposed as §§ 600.380 and 600.381.
IV. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be “a significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this action is not subject to review under that Executive Order by the Office of Information and Regulatory Affairs of the Office of Management and Budget (OMB).
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant
C. Review Under the Paperwork Reduction Act
This regulatory action will not impose any new reporting or record keeping requirements under the Paperwork Reduction Act. Reporting and record keeping requirements in subpart D have been previously cleared under Office of Management and Budget Paperwork Clearance Package Numbers 1910-0400 and 1910-0800 or are those promulgated by OMB Circular A-110, which the Office of Management and Budget proposed in August 1992 (57 FR 39018), asking for public comments, and finalized in November 1993 (58 FR 62992). No new collection of information is imposed by this proposed rule.
D
have been previously cleared under Office of Management and Budget Paperwork Clearance Package Numbers 1910-0400 and 1910-0800 or are those promulgated by OMB Circular A-110, which the Office of Management and Budget proposed in August 1992 (57 FR 39018), asking for public comments, and finalized in November 1993 (58 FR 62992). No new collection of information is imposed by this proposed rule.
D. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class of actions that would not individually or cumulatively have a significant impact on the human environment, as determined by DOE's regulations implementing the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ). Specifically, this rule deals only with agency procedures, and, therefore, is covered under the Categorical Exclusion in paragraph A6 to subpart D, 10 CFR part 1021. Accordingly, neither an environmental assessment nor an environmental impact statement is required.
E. Review Under Executive Order 13132
Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined today's proposed rule and has determined that it does not preempt State law and does not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. No further action is required by Executive Order 13132.
F
cessity for such actions. DOE has examined today's proposed rule and has determined that it does not preempt State law and does not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. No further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of Executive Order 12988.
G
3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this proposed rule meets the relevant standards of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to assess the effects of a Federal regulatory action on State, local, and tribal governments, and the private sector. The Department has determined that today's regulatory action does not impose a Federal mandate on State, local or tribal governments or on the private sector.
H. Review Under the Treasury and General Government Appropriations Act, 1999
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a Family Policymaking Assessment for any proposed rule that may affect family well-being. This rulemaking does not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 13211
Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use, (66 FR 28355, May 22, 2001) requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any proposed significant energy action
I. Review Under Executive Order 13211
Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use, (66 FR 28355, May 22, 2001) requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. Today's regulatory action is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.
V. Approval of the Office of the Secretary of Energy
The Office of the Secretary has approved the issuance of this notice of proposed rulemaking.
List of Subjects in 10 CFR Part 600
Administrative practice and procedure.

Issued in Washington, DC, on August 9, 2002. Richard H. Hopf, Director, Office of Procurement and Assistance Management, Department of Energy.
For the reasons set out in the preamble, Part 600 of Chapter II, Title 10 of the Code of Federal Regulations, is proposed to be amended as follows:
PART 600—FINANCIAL ASSISTANCE RULES
1. The authority citation for part 600 continues to read as follows:
Authority:
42 U.S.C. 7101 et seq; 31 U.S.C. 6301-6308; 50 U.S.C. 2401 et seq. unless otherwise noted.
2
nagement, Department of Energy.
For the reasons set out in the preamble, Part 600 of Chapter II, Title 10 of the Code of Federal Regulations, is proposed to be amended as follows:
PART 600—FINANCIAL ASSISTANCE RULES
1. The authority citation for part 600 continues to read as follows:
Authority:
42 U.S.C. 7101 et seq; 31 U.S.C. 6301-6308; 50 U.S.C. 2401 et seq. unless otherwise noted.
2. Section 600.3 is amended by revising the definition of nonprofit organization to read as follows:
§ 600.3 Definitions
Nonprofit organization means any corporation, trust, foundation, or institution which is entitled to exemption under section 501(c)(3) of the Internal Revenue Code, or which is not organized for profit and no part of the net earnings of which inure to the benefit of any private shareholder or individual (except that the definition of “nonprofit organization” at 48 CFR 27.301 shall apply for patent matters set forth at §§ 600.136 and 600.325).

§ 600.4 [Amended] 3. Section 600.4 is amended as follows:
a. Paragraph (a)(1), the last sentence is amended by removing “or the patent requirements of § 600.27.”
b. Paragraph (c)(2)(i), the last sentence is removed.
c. Paragraph (c)(2)(ii), the last sentence is removed.

§ 600.15 [Amended] 4. Section 600.15 is amended by removing paragraphs (b)(4) and (5).

§ 600.27 [Removed and Reserved] 5. Section 600.27 is removed and reserved.
6. The title of subpart B is revised to read as follows:

Subpart B—Uniform Administrative Requirements for Grants and Cooperative Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations
§ 600.100 [Amended] 7. Section 600.100 is amended by removing “and commercial” in the first and second sentences.

§ 600.104 [Amended] 8. Section 600.104 is amended by removing “or commercial” in the first sentence and by adding a sentence at the end of the paragraph to read as follows:

§ 600.104 Subawards
With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations
§ 600.100 [Amended] 7. Section 600.100 is amended by removing “and commercial” in the first and second sentences.

§ 600.104 [Amended] 8. Section 600.104 is amended by removing “or commercial” in the first sentence and by adding a sentence at the end of the paragraph to read as follows:

§ 600.104 Subawards. * * * For-profit subrecipients are subject to the provisions of 10 CFR part 600, subpart D, Administrative Requirements for Grants and Cooperative Agreements with For-Profit Organizations.
9. Section 600.126 is amended by removing paragraphs (d) and (e) and revising paragraph (c) to read as follows:

§ 600.126 Non-Federal audits.
(c) For-profit organizations that are subrecipients are subject to the audit requirements specified in 10 CFR 600.316.

§ 600.127 [Amended] 10. Section 600.127 is amended in paragraph (c) by removing “except for SBIR recipients as provided in § 600.181(d)(3).”
11. Section 600.136 is amended as follows:
a. Paragraph (a), the first sentence is amended by removing “that are institutions of higher education, hospitals, and other nonprofit organizations,”.
b. Paragraph (b) is revised.
c. Paragraph (d)(3) is removed.
d. Paragraph (e), the first sentence is amended by removing “For recipients that are institutions of higher education, hospitals, and other nonprofit organizations.”
The revisions read as follows:

§ 600.136 Intangible property.
moving “that are institutions of higher education, hospitals, and other nonprofit organizations,”.
b. Paragraph (b) is revised.
c. Paragraph (d)(3) is removed.
d. Paragraph (e), the first sentence is amended by removing “For recipients that are institutions of higher education, hospitals, and other nonprofit organizations.”
The revisions read as follows:

§ 600.136 Intangible property.
(b) Recipients are subject to applicable regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements.”

§§ 600.180-600.181 [Removed and Reserved] 12. Sections 600.180 and 600.181 are removed.
13. Subpart D is added in part 600 to read as follows:

Subpart D—Uniform Administrative Requirements for Grants and Cooperative Agreements With For-Profit Organizations.
Sec. General
600.301 Purpose. 600.302 Definitions. 600.303 Deviations. 600.304 Special award conditions. 600.305 Debarment and suspension. 600.306 Metric system of measurement. Post-Award Requirements
Financial and Program Management
600.310 Purpose of financial and program management. 600.311 Standards for financial management systems. 600.312 Payment. 600.313 Cost sharing or matching. 600.314 Program income. 600.315 Revision of budget and program plans. 600.316 Audits. 600.317 Allowable costs. 600.318 Fee and profit. Property Standards
600.320 Purpose of property standards. 600.321 Real property and equipment. 600.322 Federally owned property. 600.323 Property management system. 600.324 Supplies. 600.325 Intellectual property. Procurement Standards
600.330 Purpose of procurement standards. 600.331 Requirements. Reports and Records
600.340 Purpose of reports and records. 600.341 Monitoring and reporting program and financial performance. 600.342 Retention and access requirements for records
quipment. 600.322 Federally owned property. 600.323 Property management system. 600.324 Supplies. 600.325 Intellectual property. Procurement Standards
600.330 Purpose of procurement standards. 600.331 Requirements. Reports and Records
600.340 Purpose of reports and records. 600.341 Monitoring and reporting program and financial performance. 600.342 Retention and access requirements for records. Termination and Enforcement
600.350 Purpose of termination and enforcement. 600.351 Termination. 600.352 Enforcement. 600.353 Disputes and appeals. After-the-Award Requirements
600.360 Purpose. 600.361 Closeout procedures. 600.362 Subsequent adjustments and continuing responsibilities. 600.363 Collection of amounts due. Additional Provisions
600.380 Purpose. 600.381 Special provisions for Small Business Innovation Research Grants. Appendix A to Subpart D to Part 600—Patent and Data Rights Provisions
Appendix B to Subpart D to Part 600—Contract Provisions
Subpart D—Administrative Requirements for Grants and Cooperative Agreements With For-Profit Organizations
General
§ 600.301 Purpose. (a) This subpart prescribes administrative requirements for awards to for-profit organizations.
(b) Applicability to prime awards and subawards is as follows:
(1) Prime awards. DOE contracting officers must apply the provisions of this part to awards to for-profit organizations. Contracting officers must not impose requirements that are in addition to, or inconsistent with, the requirements provided in this part, except:
dministrative requirements for awards to for-profit organizations.
(b) Applicability to prime awards and subawards is as follows:
(1) Prime awards. DOE contracting officers must apply the provisions of this part to awards to for-profit organizations. Contracting officers must not impose requirements that are in addition to, or inconsistent with, the requirements provided in this part, except:
(i) In accordance with the deviation procedures or special award conditions
(ii) As required by Federal statute, Executive order, or Federal regulation implementing a statute or Executive order.
(2) Subawards. (i) Any legal entity (including any State, local government, university or other nonprofit organization, as well as any for-profit entity) that receives an award from DOE must apply the provisions of this part to subawards with for-profit organizations.
(ii) For-profit organizations that receive prime awards covered by this part must apply to each subaward the administrative requirements that are applicable to the particular type of subrecipient ( e.g. , 10 CFR part 600, subpart B, contains requirements for institutions of higher education, hospitals, or other nonprofit organizations and 10 CFR part 600, subpart C, specifies requirements for subrecipients that are States or local governments).

§ 600.302 Definitions. In addition to the definitions used in subpart A of this part, the following are definitions of terms as used in this part:
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.
Applied research means efforts that seek to determine and exploit the potential of scientific discoveries or improvements in technology, and is directed toward the development of new materials, devices, methods, and processes.
Basic research means efforts directed solely toward increasing knowledge or understanding in science and engineering
through the use of predetermined payment schedules.
Applied research means efforts that seek to determine and exploit the potential of scientific discoveries or improvements in technology, and is directed toward the development of new materials, devices, methods, and processes.
Basic research means efforts directed solely toward increasing knowledge or understanding in science and engineering.
Cash contributions means the recipient's cash outlay, including the outlay of money contributed to the recipient by third parties.
Closeout means the process by which DOE determines that all applicable administrative actions and all required work of the award have been completed by the recipient and DOE.
Cost sharing or matching means that portion of project or program costs not borne by the Federal Government.
Demonstration means a project designed to determine the technical feasibility and economic potential of a technology on either a pilot plant or a prototype scale.
Development means efforts to create or advance new technology or demonstrate the viability of applying existing technology to new products and processes.
Disallowed costs means those charges to an award that the DOE contracting officer determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award.
DOE means the Department of Energy, including the National Nuclear Security Administration (NNSA).
Equipment means tangible, nonexpendable personal property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.
Excess property means property under the control of any DOE Headquarters or field office that, as determined by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
Federal funds authorized means the total amount of Federal funds obligated by the Federal Government for use by the recipient
n one year and an acquisition cost of $5,000 or more per unit.
Excess property means property under the control of any DOE Headquarters or field office that, as determined by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
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.
Federally owned property means property in the possession of, or directly acquired by, the Government and subsequently made available to the recipient.
Funding period means the period of time when Federal funding is available for obligation by the recipient.
Incremental Funding means a method of funding a grant or cooperative agreement where the funds initially obligated to the award are less than the total amount of the award, and DOE anticipates making additional obligations of funds when appropriated funds become available.
Obligations means the amount 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.
Outlays or expenditures means charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied, and the amount of cash advances and payments made to subrecipients
ays or expenditures means charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied, and the amount of cash advances and payments made to subrecipients. For reports prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees, and for other amounts becoming owed under programs for which no current services or performance are required.
Personal property means property of any kind except real property. It may be:
(1) Tangible, having physical existence ( i.e. , equipment and supplies); or
(2) Intangible, having no physical existence, such as patents, copyrights, data, and software.
Prior approval means written or electronic approval by an authorized official evidencing prior consent.
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. 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
gram 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 program 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.
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.
Property means real property and personal property (equipment, supplies, and intellectual property), unless otherwise stated.
Real property means land, including land improvements, structures and appurtenances thereto, but excludes movable machinery and equipment.
Small award means an award not exceeding the simplified acquisition threshold fixed at 41 U.S.C. 403(11) (currently $100,000).
Small business concern means a small business as defined at section 2 of Public Law 85-536 (16 U.S.C. 632) and the implementing regulations of the Administrator of the Small Business Administration. The criteria and size standards for small business concerns are contained in 13 CFR part 121.
Subaward means financial assistance in the form of money, or property in lieu
Subrecipient means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds or property provided.
Supplies means tangible, expendable personal property that is charged directly to the award and that has a useful life of less than one year or an acquisition cost of less than $5,000 per unit
sistance in the form of money, or property in lieu
Subrecipient means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds or property provided.
Supplies means tangible, expendable personal property that is charged directly to the award and that has a useful life of less than one year or an acquisition cost of less than $5,000 per unit.
Suspension means an action by DOE that temporarily withdraws Federal sponsorship under an award, pending corrective action by the recipient or pending a decision to terminate the award by DOE. Suspension of an award is a separate action from suspension of a recipient under 10 CFR part 1036.
Termination means the cancellation of an award, in whole or in part, under an agreement at any time prior to either:
(1) The date on which all work under an award is completed; or
(2) The date on which Federal sponsorship ends, as provided in the award document or any supplement or amendment thereto.
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.
Unobligated balance means the portion of the funds authorized by DOE that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.

§ 600.303 Deviations. (a) Individual deviations. Individual deviations affecting only one award are subject to the procedures stated in 10 CFR 600.4.
fiable to the project or program.
Unobligated balance means the portion of the funds authorized by DOE that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.

§ 600.303 Deviations. (a) Individual deviations. Individual deviations affecting only one award are subject to the procedures stated in 10 CFR 600.4.
(b) Class deviations. Class deviations affecting more than one financial assistance transaction are subject to the procedures stated in 10 CFR 600.4.

§ 600.304 Special award conditions. (a) Contracting officers may impose additional requirements as needed, over and above those provided in this subpart, 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) Before imposing additional requirements, DOE must notify the applicant or 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.
nal requirements, DOE must notify the applicant or 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) The contracting officer must remove any special conditions if the circumstances that prompted them have been corrected.

§ 600.305 Debarment and suspension. Recipients must comply with the nonprocurement debarment and suspension common rule implemented in 10 CFR part 1036. This common rule restricts subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.

§ 600.306 Metric system of measurement. (a) The Metric Conversion Act of 1975, as amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 205) and implemented by Executive Order 12770, states that:
(1) The metric system is the preferred measurement system for U.S. trade and commerce.
(2) The metric system of measurement will be used, to the extent economically feasible, in federal agencies' procurements, grants, and other business-related activities.
(3) Metric implementation is not required if such use is likely to cause significant inefficiencies or loss of markets to United States firms.
The metric system is the preferred measurement system for U.S. trade and commerce.
(2) The metric system of measurement will be used, to the extent economically feasible, in federal agencies' procurements, grants, and other business-related activities.
(3) Metric implementation is not required if such use is likely to cause significant inefficiencies or loss of markets to United States firms.
(b) Recipients are encouraged to use the metric system to the maximum extent practicable in measurement-sensitive activities and in measurement-sensitive outputs resulting from DOE funded programs.
Post-Award Requirements
Financial and Program Management

§ 600.310 Purpose of financial and program management. Sections 600.311 through 600.318 prescribe standards for financial management systems; methods for making payments; and rules for cost sharing and matching, program income, revisions to budgets and program plans, audits, allowable costs, and fee and profit.

§ 600.311 Standards for financial management systems. (a) Recipients are encouraged to use existing financial management systems established for doing business in the commercial marketplace to the extent that the systems comply with Generally Accepted Accounting Principles (GAAP) and the minimum standards in this section. At a minimum, a recipient's financial management system must provide:
(1) Effective control of all funds. Control systems must be adequate to ensure that costs charged to Federal funds and those counted as the recipient's cost share or match are consistent with requirements for cost reasonableness, allowability, and allocability in the applicable cost principles (see § 600.317) and in the terms and conditions of the award.
(2) Accurate, current and complete records that document, for each project funded wholly or in part with Federal funds, the source and application of the Federal funds and the recipient's required cost share or match. These records must:
rements for cost reasonableness, allowability, and allocability in the applicable cost principles (see § 600.317) and in the terms and conditions of the award.
(2) Accurate, current and complete records that document, for each project funded wholly or in part with Federal funds, the source and application of the Federal funds and the recipient's required cost share or match. These records must:
(i) Contain information about receipts, authorizations, assets, expenditures, program income, and interest.
(ii) Be adequate to make comparisons of outlays with amounts budgeted for each award (as required for programmatic and financial reporting under § 600.341). Where appropriate, financial information should be related to performance and unit cost data.
(3) To the extent that advance payments are authorized under § 600.312, procedures that minimize the time elapsing between the transfer of funds to the recipient from the Government and the recipient's disbursement of the funds for program purposes.
(4) A system to support charges to Federal awards for salaries and wages, whether treated as direct or indirect costs. If employees work on multiple activities or cost objectives, a distribution of their salaries and wages must be supported by personnel activity reports which:
(i) Reflect an after the fact distribution of the actual activity of each employee.
(ii) Account for the total activity for which each employee is compensated.
(iii) Are prepared at least monthly, and coincide with one or more pay periods.
(b) If the Federal Government guarantees or insures the repayment of money borrowed by the recipient, DOE, 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.
(c) DOE may require adequate fidelity bond coverage if the recipient lacks sufficient coverage to protect the Federal Government's interest.
sures the repayment of money borrowed by the recipient, DOE, 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.
(c) DOE may require adequate fidelity bond coverage if the recipient lacks sufficient coverage to protect the Federal Government's interest.
(d) If bonds are required in the situations described in paragraphs (b) and (c) of this section, 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.”

§ 600.312 Payment. (a) Methods available. Payment methods for awards with for-profit organizations are:
(1) Reimbursement. Under this method, the recipient requests reimbursement for costs incurred during a particular time period. In cases where the recipient submits requests for payment to the contracting officer, the DOE payment office reimburses the recipient by electronic funds transfer after approval of the request by the designated contracting officer.
(2) Advance payments. Under this method, DOE makes a payment to a recipient based upon projections of the recipient's cash needs. The payment generally is made upon the recipient's request, although predetermined payment schedules may be used when the timing of the recipient's needs to disburse funds can be predicted in advance with sufficient accuracy to ensure compliance with paragraph (b)(2)(iii) of this section.
(b) Selecting a method. (1) The preferred payment method is the reimbursement method, as described in paragraph (a)(1) of this section.
(2) Advance payments, as described in paragraph (a)(2) of this section, may be used in exceptional circumstances, subject to the following conditions:
edicted in advance with sufficient accuracy to ensure compliance with paragraph (b)(2)(iii) of this section.
(b) Selecting a method. (1) The preferred payment method is the reimbursement method, as described in paragraph (a)(1) of this section.
(2) Advance payments, as described in paragraph (a)(2) of this section, may be used in exceptional circumstances, subject to the following conditions:
(i) The contracting officer, in consultation with the program official, determines in writing that advance payments are necessary or will materially contribute to the probability of success of the project contemplated under the award ( e.g. , as startup funds for a project performed by a newly formed company).
(ii) Cash advances must be limited to the minimum amounts needed to carry out the program.
(iii) Recipients and DOE must maintain procedures to ensure that the timing of cash advances is as close as is administratively feasible to the recipients' disbursements of the funds for program purposes, including direct program or project costs and the proportionate share of any allowable indirect costs.
(iv) Recipients must maintain advance payments of Federal funds in interest-bearing accounts, and remit annually the interest earned to the contracting officer for return to the Department of Treasury's miscellaneous receipts account, unless one of the following applies:
(A) The recipient receives less than $120,000 in Federal awards per year.
(B) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances.
(C) The depository would require an average or minimum balance so high that establishing an interest bearing account would not be feasible, given the expected Federal and non-Federal cash resources.
(c) Frequency of payments. For either reimbursements or advance payments, recipients may submit requests for payment monthly, or more often if authorized by the contracting officer.
cash balances.
(C) The depository would require an average or minimum balance so high that establishing an interest bearing account would not be feasible, given the expected Federal and non-Federal cash resources.
(c) Frequency of payments. For either reimbursements or advance payments, recipients may submit requests for payment monthly, or more often if authorized by the contracting officer.
(d) Forms for requesting payment. DOE may authorize recipients to use the SF-270, “Request for Advance or Reimbursement;” the SF-271, “Outlay Report and Request for Reimbursement for Construction Programs;” or prescribe other forms or formats as necessary.
(e) Timeliness of payments. Payments normally will be made within 30 calendar days of the receipt of a recipient's request for reimbursement or advance by the office designated to receive the request, unless the billing is improper.
(f) Precedence of other available funds. Recipients must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries, credits, discounts, and interest earned on such funds before requesting additional cash payments.
(g) Withholding of payments. Unless otherwise required by statute, contracting officers may not withhold payments for proper charges made by recipients during the project period for reasons other than the following:
(1) A recipient failed to comply with project objectives, the terms and conditions of the award, or Federal reporting requirements, in which case the contracting officer may suspend payments in accordance with § 600.352.
erwise required by statute, contracting officers may not withhold payments for proper charges made by recipients during the project period for reasons other than the following:
(1) A recipient failed to comply with project objectives, the terms and conditions of the award, or Federal reporting requirements, in which case the contracting officer may suspend payments in accordance with § 600.352.
(2) The recipient is delinquent on a debt to the United States (see definitions of “debt” and “delinquent debt” in 32 CFR 22.105). In that case, the contracting officer may, upon reasonable notice, withhold payments to the recipient until the debt owed is resolved.

§ 600.313 Cost sharing or matching. (a) Acceptable contributions. All contributions, including cash contributions and third party in-kind contributions, must be accepted as part of the recipient's cost sharing or matching if such contributions meet all of the following criteria:
(1) They are verifiable from the recipient's records.
(2) They are not included as contributions for any other federally-assisted project or program.
(3) They are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
(4) They are allowable under § 600.317.
(5) They are not paid by the Federal Government under another award unless authorized by Federal statute to be used for cost sharing or matching.
(6) They are provided for in the approved budget.
(7) They conform to other provisions of this part, as applicable.
and reasonable for proper and efficient accomplishment of project or program objectives.
(4) They are allowable under § 600.317.
(5) They are not paid by the Federal Government under another award unless authorized by Federal statute to be used for cost sharing or matching.
(6) They are provided for in the approved budget.
(7) They conform to other provisions of this part, as applicable.
(b) Valuing and documenting contributions. (1) Valuing recipient's property or services of recipient's employees. Values are established in accordance with the applicable cost principles in § 600.317, which means that amounts chargeable to the project are determined on the basis of costs incurred. For real property or equipment used on the project, the cost principles authorize depreciation or use charges. The full value of the item may be applied when the item will be consumed in the performance of the award or fully depreciated by the end of the award. In cases where the full value of a donated capital asset is to be applied as cost sharing or matching, that full value must be the lesser of the following:
(i) The certified value of the remaining life of the property recorded in the recipient's accounting records at the time of donation; or
(ii) The current fair market value. If there is sufficient justification, the contracting officer may approve the use of the current fair market value of the donated property, even if it exceeds the certified value at the time of donation to the project. The contracting officer may accept the use of any reasonable basis for determining the fair market value of the property.
(2) Valuing services of others' employees. If an employer other than
sufficient justification, the contracting officer may approve the use of the current fair market value of the donated property, even if it exceeds the certified value at the time of donation to the project. The contracting officer may accept the use of any reasonable basis for determining the fair market value of the property.
(2) Valuing services of others' employees. If an employer other than
(3) Valuing volunteer services. 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.
(4) Valuing property donated by third parties. (i) Donated supplies may include such items as office supplies or laboratory supplies. Value assessed to donated supplies included in the cost sharing or matching share must be reasonable and must not exceed the fair market value of the property at the time of the donation.
are reasonable, allowable, and allocable may be included in the valuation.
(4) Valuing property donated by third parties. (i) Donated supplies may include such items as office supplies or laboratory supplies. Value assessed to donated supplies included in the cost sharing or matching share must be reasonable and must not exceed the fair market value of the property at the time of the donation.
(ii) Normally only depreciation or use charges for equipment and buildings may be applied. However, the fair rental charges for land and the full value of equipment or other capital assets may be allowed, when they will be consumed in the performance of the award or fully depreciated by the end of the award, provided that the contracting officer has approved the charges. When use charges are applied, values must be determined in accordance with the usual accounting policies of the recipient, with the following qualifications:
(A) The value of donated space must 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.
(B) The value of loaned equipment must not exceed its fair rental value.
(5) Documentation. 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 services and property must be documented.

§ 600.314 Program income. (a) DOE must apply the standards in this section to the disposition of program income from projects financed in whole or in part with Federal funds.
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 services and property must be documented.

§ 600.314 Program income. (a) DOE must apply the standards in this section to the disposition of program income from projects financed in whole or in part with Federal funds.
(b) Unless program regulations or the terms and conditions of the award provide otherwise, recipients, without any further accounting to DOE, may retain program income earned:
(1) From license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award.
(2) After the end of the project period.
(c) Unless program regulations or the terms and conditions of the award provide otherwise, costs incident to the generation of program income for which there is some obligation to the Government may be deducted from gross income to determine program income, provided these costs have not been charged to the award.
(d) Other than any program income excluded pursuant to paragraphs (b) and (c) of this section, program income earned during the project period must be retained by the recipient and used in one or more of the following ways, as specified in program regulations or the terms and conditions of the award:
(1) Added to funds committed to the project by DOE 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.
egulations or the terms and conditions of the award:
(1) Added to funds committed to the project by DOE 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.
(e) If the program regulation or terms and conditions of an award authorize the disposition of program income as described in paragraph (d)(1) or (d)(2) of this section, and stipulate a limit on the amounts that may be used in those ways, program income in excess of the stipulated limits must be used in accordance with paragraph (d)(3) of this section.
(f) In the event that the program regulation or terms and conditions of the award do not specify how program income is to be used, paragraph (d)(3) of this section applies automatically to all projects or programs except research. For awards that support basic or applied research, paragraph (d)(1) of this section applies automatically unless the terms and conditions specify another alternative or the recipient is subject to special award conditions, as indicated in § 600.304.
(g) Proceeds from the sale of property that is acquired, rather than fabricated, under an award are not program income and must be handled in accordance with the requirements of §§ 600.320 through 600.325 of this part.

§ 600.315 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 includes the sum of the Federal and non-Federal shares when there are cost sharing requirements. The budget plan must be related to performance for program evaluation purposes, whenever appropriate.
320 through 600.325 of this part.

§ 600.315 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 includes the sum of the Federal and non-Federal shares when there are cost sharing requirements. The budget plan must be related to performance for program evaluation purposes, whenever appropriate.
(b) The recipient must obtain the contracting officer's prior approval if a revision is necessary for either of the following two reasons:
(1) A 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) A need for additional Federal funding.
(c) The recipient must obtain the contracting officer's prior approval if a revision is necessary for any of the following six reasons, unless the requirement for prior approval is specifically waived in the program regulation or terms and conditions of the award:
(1) A change in the approved project director, principal investigator, or other key person specified in the application or award document.
(2) 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.
(3) The inclusion of any additional costs that require prior approval in accordance with the applicable cost principles for Federal funds and the requirements applicable to the recipient's cost share or match, as provided in § 600.313 and § 600.317, respectively.
(4) The inclusion of pre-award costs for periods greater than the 90 calendar days immediately preceding the effective date of the award.
(5) A “no-cost” extension of the project period.
(6) Any subaward, transfer, or contracting out of substantive program performance under an award, unless described in the application and funded in the approved awards.
600.313 and § 600.317, respectively.
(4) The inclusion of pre-award costs for periods greater than the 90 calendar days immediately preceding the effective date of the award.
(5) A “no-cost” extension of the project period.
(6) Any subaward, transfer, or contracting out of substantive program performance under an award, unless described in the application and funded in the approved awards.
(d) If specifically required in the program regulation or the terms and conditions of the award, the recipient
(1) The transfer of funds among direct cost categories, 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 DOE.
(2) For awards that provide support for both construction and nonconstruction work, any fund or budget transfers between the two types of work supported.
(e) Within 30 calendar days from the date of receipt of the recipient's request for budget revisions, the contracting officer must review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, the contracting officer must inform the recipient in writing of the date when the recipient may expect the decision.

§ 600.316 Audits. (a) Any recipient that expends $500,000 or more in a year under Federal awards must have an audit made for that year by an independent auditor, in accordance with paragraph (b) of this section. The audit generally should be made a part of the regularly scheduled, annual audit of the recipient's financial statements. However, it may be more economical in some cases to have Federal awards separately audited, and a recipient may elect to do so, unless that option is precluded by award terms and conditions or by Federal laws or regulations applicable to the program(s) under which the awards were made.
enerally should be made a part of the regularly scheduled, annual audit of the recipient's financial statements. However, it may be more economical in some cases to have Federal awards separately audited, and a recipient may elect to do so, unless that option is precluded by award terms and conditions or by Federal laws or regulations applicable to the program(s) under which the awards were made.
(b) The auditor must determine and report on whether:
(1) The recipient has an internal control structure that provides reasonable assurance that it is managing Federal awards in compliance with Federal laws and regulations and the terms and conditions of the awards.
(2) Based on a sampling of Federal award expenditures, the recipient has complied with laws, regulations, and award terms that may have a direct and material effect on Federal awards.
(c) The recipient must make the auditor's report available to the DOE contracting officers whose awards are affected.
(d) Before requesting an audit in addition to the independent audit, the contracting officer must:
(1) Consider whether the independent audit satisfies his or her requirements;
(2) Limit the scope of such additional audit to areas not adequately addressed by the independent audit; and
(3) If DOE is not the Federal agency with the predominant fiscal interest in the recipient, coordinate with the agency that has the predominant fiscal interest.
(e) The recipient and its Federal cognizant agency for audit should develop a coordinated audit approach to minimize duplication of audit work.
e of such additional audit to areas not adequately addressed by the independent audit; and
(3) If DOE is not the Federal agency with the predominant fiscal interest in the recipient, coordinate with the agency that has the predominant fiscal interest.
(e) The recipient and its Federal cognizant agency for audit should develop a coordinated audit approach to minimize duplication of audit work.
(f) Audit costs (including a reasonable allocation of the costs of the audit of the recipient's financial statement, based on the relative benefit to the Government and the recipient) are allowable costs of DOE awards.

§ 600.317 Allowable costs. (a) DOE determines allowability of costs in accordance with the cost principles applicable to the type of entity incurring the cost as follows:
(1) For-profit organizations. Allowability of costs incurred by for-profit organizations and those nonprofit organizations listed in Attachment C to OMB Circular A-122 is determined in accordance with the for-profit cost principles in 48 CFR part 31 in the Federal Acquisition Regulation, except that patent prosecution costs are not allowable unless specifically authorized in the award document.
(2) Other types of organizations. Allowability of costs incurred by other types of organizations that may be subrecipients under a prime award to a for-profit organization is determined as follows:
(i) Institutions of higher education. Allowability is determined in accordance with OMB Circular A-21, “Cost Principles for Educational Institutions.”
(ii) Other nonprofit organizations. Allowability is determined in accordance with OMB Circular A-122, “Cost Principles for Nonprofit Organizations.”
(iii) Hospitals. Allowability is determined in accordance with the provisions of 45 CFR part 74, Appendix E, “Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals.”
ional Institutions.”
(ii) Other nonprofit organizations. Allowability is determined in accordance with OMB Circular A-122, “Cost Principles for Nonprofit Organizations.”
(iii) Hospitals. Allowability is determined in accordance with the provisions of 45 CFR part 74, Appendix E, “Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals.”
(iv) Governmental organizations. Allowability for State, local, or federally recognized Indian tribal governments is determined in accordance with OMB Circular A-87, “Cost Principles for State and Local Governments.”
(b) Pre-award costs. If a recipient incurs pre-award costs without the prior approval of the contracting officer, DOE may pay those costs incurred within the ninety calendar day period immediately preceding the effective date of the award, if such costs are:
(1) Necessary for the effective and economical conduct of the project;
(2) Otherwise allowable in accordance with the applicable cost principles; and
(3) Less than the total value of the award.

§ 600.318 Fee and profit. (a) Grants and cooperative agreements may not provide for the payment of fee or profit to recipients or subrecipients, except for awards made pursuant to the Small Business Innovation Research or Small Business Technology Transfer Research programs.
(b) A recipient or subrecipient may pay a fee or profit to a contractor providing goods or services under a contract.
Property Standards

§ 600.320 Purpose of property standards. Sections 600.321 through 600.325 set forth uniform standards for management, use, and disposition of property. DOE encourages recipients to use existing property-management systems to the extent that the systems meet these minimum requirements.

§ 600.321 Real property and equipment. (a) Prior approval for acquisition with Federal funds
rty Standards

§ 600.320 Purpose of property standards. Sections 600.321 through 600.325 set forth uniform standards for management, use, and disposition of property. DOE encourages recipients to use existing property-management systems to the extent that the systems meet these minimum requirements.

§ 600.321 Real property and equipment. (a) Prior approval for acquisition with Federal funds. Recipients may purchase real property or equipment in whole or in part with Federal funds under an award only with the prior approval of the contracting officer.
(b) Title. Unless a statute specifically authorizes and the award specifies that title to property vests unconditionally in the recipient, title to real property or equipment vests in the recipient subject to the conditions that the recipient:
(1) Use the real property or equipment for the authorized purposes of the project until funding for the project ceases, or until the property is no longer needed for the purposes of the project;
(2) Not encumber the property without approval of the contracting officer; and
(3) Use and dispose of the property in accordance with paragraphs (d) and (e) of this section.
(c) Federal interest in real property or equipment offered as cost-share. A recipient may offer the full value of real property or equipment that is purchased with recipient's funds or that is donated by a third party to meet a portion of any required cost sharing or matching, subject to the requirements in § 600.313. If a resulting award includes such property as a portion of the recipient's cost share, the Government has a financial interest in the property, ( i.e. , a share of the property value equal to the
(d) Insurance. Recipients must, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with DOE funds as provided to property owned by the recipient.
600.313. If a resulting award includes such property as a portion of the recipient's cost share, the Government has a financial interest in the property, ( i.e. , a share of the property value equal to the
(d) Insurance. Recipients must, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with DOE funds as provided to property owned by the recipient.
(e) Use. If real property or equipment is acquired in whole or in part with Federal funds under an award and the award does not specify that title vests unconditionally in the recipient, the real property or equipment is subject to the following:
(1) During the time that the real property or 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 does not interfere with the work on the project or program for which the real property or equipment was originally acquired. Use of the real property or equipment on other projects is subject to the following order of priority:
(i) Activities sponsored by DOE grants, cooperative agreements, or other assistance awards;
(ii) Activities sponsored by other Federal agencies' grants, cooperative agreements, or other assistance awards;
(iii) Activities under Federal procurement contracts or activities not sponsored by any Federal agency. If so used, use charges must be assessed to those activities. For real property or equipment, the use charges must be at rates equivalent to those for which comparable real property or equipment may be leased.
(2) After Federal funding for the project ceases or if the real property or equipment is no longer needed for the purposes of the project, the recipient may use the real property or equipment for other projects, insofar as:
ssed to those activities. For real property or equipment, the use charges must be at rates equivalent to those for which comparable real property or equipment may be leased.
(2) After Federal funding for the project ceases or if the real property or equipment is no longer needed for the purposes of the project, the recipient may use the real property or equipment for other projects, insofar as:
(i) There are Federally sponsored projects for which the real property or equipment may be used. If the only use for the real property or equipment is for projects that have no Federal sponsorship, the recipient must proceed with disposition of the real property or equipment, in accordance with paragraph (f) of this section.
(ii) The recipient obtains written approval from the contracting officer to do so. The contracting officer must ensure that there is a formal change of accountability for the real property or equipment to a currently funded, Federal award.
(iii) The recipient's use of the real property or equipment for other projects is in the same order of priority as described in paragraph (e)(1) of this section.
(f) Disposition. (1) If an item of real property or equipment is no longer needed for Federally sponsored projects, the recipient has the following options:
(i) If the property is equipment with a current per unit fair market value of less than $5,000, it may be retained, sold, or otherwise disposed of with no further obligation to DOE.
(ii) If the property that is no longer needed is equipment (rather than real property), the recipient may wish to replace it with an item that is needed currently for the project by trading in or selling to offset the costs of the replacement equipment, subject to the approval of the contracting officer.
,000, it may be retained, sold, or otherwise disposed of with no further obligation to DOE.
(ii) If the property that is no longer needed is equipment (rather than real property), the recipient may wish to replace it with an item that is needed currently for the project by trading in or selling to offset the costs of the replacement equipment, subject to the approval of the contracting officer.
(iii) The recipient may elect to retain title, without further obligation to the Federal Government, by compensating the Federal Government for that percentage of the current fair market value of the real property or equipment that is attributable to the Federal participation in the project.
(iv) If the recipient does not elect to retain title to real property or equipment or does not request approval to use equipment as trade-in or offset for replacement equipment, the recipient must request disposition instructions from the responsible agency.
(2) If a recipient requests disposition instructions, the contracting officer must:
(i) For equipment (but not real property), consult with the DOE Project Director to determine whether the condition and nature of the equipment warrant excess screening within DOE. If screening is warranted, the equipment will be made available for reutilization within DOE through the Energy Asset Disposal System (EADS). If no DOE requirement is identified within a 30-day period, EADS automatically reports the availability of the equipment to the General Services Administration, to determine whether a requirement for the equipment exists in other Federal agencies.
thin DOE. If screening is warranted, the equipment will be made available for reutilization within DOE through the Energy Asset Disposal System (EADS). If no DOE requirement is identified within a 30-day period, EADS automatically reports the availability of the equipment to the General Services Administration, to determine whether a requirement for the equipment exists in other Federal agencies.
(ii) For either real property or equipment, issue instructions to the recipient for disposition of the property no later than 120 calendar days after the recipient's request. The contracting officer's options for disposition are to direct the recipient to:
(A) Transfer title to the real property or equipment to the Federal Government or to an eligible third party provided that, in such cases, the recipient is entitled to compensation for its attributable percentage of the current fair market value of the real property or equipment, plus any reasonable shipping or interim storage costs incurred.
(B) Sell the real property or equipment and pay the Federal Government for that percentage of the current fair market value of the property that is attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sale proceeds). If the recipient is authorized or required to sell the real property or equipment, the recipient must use competitive procedures that result in the highest practicable return.
rcentage of the current fair market value of the property that is attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sale proceeds). If the recipient is authorized or required to sell the real property or equipment, the recipient must use competitive procedures that result in the highest practicable return.
(3) If the responsible agency fails to issue disposition instructions within 120 calendar days of the recipient's request, the recipient must dispose of the real property or equipment through the option described in paragraph (f)(2)(ii)(B) of this section.

§ 600.322 Federally owned property. (a) Annual inventory. The recipient must submit annually to the contracting officer an inventory listing of all Federally owned property in its custody, i.e. , property furnished by the Federal Government, rather than acquired by the recipient with Federal funds under the award.
(b) Insurance. The recipient may not insure Federally owned property unless required by the terms and conditions of the award.
(c) Use on other activities. (1) Use of federally owned property on other activities is permissible, if authorized by the contracting officer responsible for administering the award to which the property currently is charged.
(2) Use on other activities must be in the following order of priority:
(i) Activities sponsored by DOE grants, cooperative agreements, or other assistance awards;
(ii) Activities sponsored by other Federal agencies' grants, cooperative agreements, or other assistance awards;
(iii) Activities under Federal procurement contracts or activities not sponsored by any Federal agency. If so used, use charges must be assessed to those activities. For real property or equipment, the use charges must be at rates equivalent to those for which comparable real property or equipment may be leased.
other Federal agencies' grants, cooperative agreements, or other assistance awards;
(iii) Activities under Federal procurement contracts or activities not sponsored by any Federal agency. If so used, use charges must be assessed to those activities. For real property or equipment, the use charges must be at rates equivalent to those for which comparable real property or equipment may be leased.
(d) Disposition of property. Upon completion of the award, the recipient must submit to the contracting officer a final inventory of Federally owned property. DOE may:
(1) Use the property to meet another Federal Government need ( e.g. , by transferring accountability for the
(2) Declare the property to be excess property and either:
(i) Report the property to the General Services Administration through EADS, in accordance with the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 483(b)(2)), as implemented by General Services Administration regulations at 41 CFR 101-47.202; or
(ii) Dispose of the property by alternative methods, if there is authority under law, such as the Federal Technology Transfer Act, 15 U.S.C. 3710(i).

§ 600.323 Property management system. The recipient's property management system must include the following:
(a) Property records must be maintained, to include the following information for property that is Federally owned, equipment that is acquired in whole or in part with Federal funds, or property or equipment that is used as cost sharing or matching:
(1) A description of the property.
(2) Manufacturer's serial number, model number, Federal stock number, national stock number, or any other identification number.
(3) Source of the property, including the award number.
(4) Whether title vests in the recipient or the Federal Government.
(5) Acquisition date (or date received, if the property was furnished by the Federal Government) and cost.
A description of the property.
(2) Manufacturer's serial number, model number, Federal stock number, national stock number, or any other identification number.
(3) Source of the property, including the award number.
(4) Whether title vests in the recipient or the Federal Government.
(5) Acquisition date (or date received, if the property was furnished by the Federal Government) and cost.
(6) Information from which one can calculate the percentage of Federal participation in the cost of the property (not applicable to property furnished by the Federal Government).
(7) The location and condition of the property and the date the information was reported.
(8) 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 Government for its share.
(b) Federally owned equipment must be marked to indicate Federal ownership.
(c) A physical inventory must be taken and the results reconciled with the property 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 property.
(d) A control system must be in effect to insure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft of property must be investigated and fully documented. If the property is owned by the Federal Government, the recipient must promptly notify the Federal agency responsible for administering the property.
(e) Adequate maintenance procedures must be implemented to keep the property in good condition.

§ 600.324 Supplies. (a) Title vests in the recipient upon acquisition of supplies acquired with Federal funds under an award.
and fully documented. If the property is owned by the Federal Government, the recipient must promptly notify the Federal agency responsible for administering the property.
(e) Adequate maintenance procedures must be implemented to keep the property in good condition.

§ 600.324 Supplies. (a) Title vests in the recipient upon acquisition of supplies acquired with Federal funds under an award.
(b) Upon termination or completion of the project or program, the recipient may retain any unused supplies. If the inventory of unused supplies exceeds $5,000 in total aggregate value and the items are not needed for any other Federally sponsored project or program, the recipient may retain the items for use on non-Federal sponsored activities or sell them, but must, in either case, compensate the Federal Government for its share.

§ 600.325 Intellectual property. (a) Scope. This section sets forth the policies with regard to disposition of rights to data and to inventions conceived or first actually reduced to practice in the course of, or under, a grant or cooperative agreement with DOE.
(b) Patent rights—small business concerns and nonprofit organizations. In accordance with 35 U.S.C. 202, if you are a small business concern or a nonprofit organization and you receive a grant, cooperative agreement, subaward, or contract for research, developmental, or demonstration activities, then, unless there are “exceptional circumstances” as described in 35 U.S.C. 202(e), your award must contain the standard clause in Appendix A to this subpart, entitled “Patents Rights (Small Business Firms and Nonprofit Organizations)” which provides you the right to elect ownership of inventions made under your award.
baward, or contract for research, developmental, or demonstration activities, then, unless there are “exceptional circumstances” as described in 35 U.S.C. 202(e), your award must contain the standard clause in Appendix A to this subpart, entitled “Patents Rights (Small Business Firms and Nonprofit Organizations)” which provides you the right to elect ownership of inventions made under your award.
(c) Patent rights—other than small business concerns, e.g., large businesses.
(1) No patent waiver. Except as provided by paragraph (d)(2) of this section, if you are a large business and you receive an award or a subaward for research, development, and demonstration activities, then your award must contain the standard clause in Appendix A to this subpart, entitled “Patent Rights (Large Business Firms)—No Waiver” which provides that DOE owns the patent rights to inventions made under your award.
(2) Patent waiver granted. Paragraph (c)(1) of this section does not apply if:
(i) DOE grants a class waiver for a particular program under 10 CFR part 784;
(ii) You request and receive an advance patent waiver under 10 CFR part 784; or
(iii) Your subaward is covered by a waiver granted under the prime award.
(3) Special provision. Normally, your agreement will not include a background patent and data provision. However, in order to provide heightened assurance of commercialization, a provision providing for a right to require licensing of background inventions under special circumstances may be included.
10 CFR part 784; or
(iii) Your subaward is covered by a waiver granted under the prime award.
(3) Special provision. Normally, your agreement will not include a background patent and data provision. However, in order to provide heightened assurance of commercialization, a provision providing for a right to require licensing of background inventions under special circumstances may be included.
(d) Rights in data—general rule.
(1) Subject to paragraphs (d)(2) and (3) of this section, and except as otherwise provided by paragraphs (e), (f), and (g) of this section or other law, any award under this subpart must contain the standard clause in Appendix A to this subpart, entitled “Rights in Data—General.”
(2) Normally, your agreement will not require the delivery of limited rights data or restricted computer software. However, if the contracting officer, in consultation with DOE patent counsel and the DOE program official, determines that delivery of limited rights data or restricted computer software is necessary, the contracting officer, after negotiation with you, may insert in the award the standard clause as modified by Alternates I and/or II set forth in Appendix A to this subpart.
(3) If software is specified for delivery to DOE or if other special circumstances exist, e.g. , DOE specifying “open-source” treatment of software, then the contracting officer, after negotiation with the recipient, may include in the award special provisions requiring the recipient to obtain written approval of the contracting officer prior to asserting copyright in the software and/or modifications to the retained Government license.
to DOE or if other special circumstances exist, e.g. , DOE specifying “open-source” treatment of software, then the contracting officer, after negotiation with the recipient, may include in the award special provisions requiring the recipient to obtain written approval of the contracting officer prior to asserting copyright in the software and/or modifications to the retained Government license.
(e) Rights in data—programs covered under special protected data statutes.
(1) If a statute, other than those providing for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) programs, provides for a period of time, typically up to five years, during which data produced under an award for research, development, and demonstration may be protected from
(2) An award under paragraph (e)(1) of this section is subject to the provisions of paragraphs (d)(2) and (3).
(f) Rights in data—SBIR/STTR programs.
(1) If you receive an award under the SBIR or STTR program, then the contracting officer must insert in the award the standard clause in the General Terms and Conditions for SBIR Grants, entitled “Rights in Data—SBIR Program.”
(2) The data rights provisions for SBIR/STTR grants are contained in the award terms and conditions for SBIR grants located at http://www.pr.doe.gov on the Professionals Homepage under Financial Assistance, Regulations and Guidance.
(g) Authorization and consent. (1) Except as provided in paragraph (g)(2) of this section, work performed by a recipient under a financial assistance award is not subject to authorization and consent to the use of a patented invention, and the Government assumes no liability for patent infringement by the recipient under 28 U.S.C. 1498.
s.

§ 600.331 Requirements. The following requirements pertain to recipients' procurements funded in whole or in part with Federal funds or with recipients' cost-share or match:
(a) Reasonable cost. Recipients' procurement procedures must use best commercial practices to ensure reasonable cost for procured goods and services. Recipients are encouraged to buy commercial items, if practicable.
(b) Pre-award review of certain procurements. If the contracting officer determines that there is a compelling need to perform a pre-award review of a specific transaction and the terms of the award identify the specific transaction and provide for such a review, then the recipient must obtain the contracting officer's approval prior to awarding the transaction and must provide the contracting officer the following documents to review:
(1) Request for proposals or invitation to bid, if any;
(2) Cost estimate;
(3) Proposal/bid;
(4) Proposed award document; and
(5) Summary of negotiations or justification for award.
(c) Contract provisions. (1) 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.
(2) All contracts in excess of the simplified acquisition threshold must contain suitable provisions for termination for default by the recipient and for termination due to circumstances beyond the control of the contractor.
ive, 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.
(2) All contracts in excess of the simplified acquisition threshold must contain suitable provisions for termination for default by the recipient and for termination due to circumstances beyond the control of the contractor.
(3) All negotiated contracts in excess of the simplified acquisition threshold must include a provision permitting access of DOE, the Inspector General, the Comptroller General of the United States, or any of their duly authorized representatives, to any books, documents, papers, and records of the contractor that are directly pertinent to a specific program, for the purpose of making audits, examinations, excerpts, transcriptions, and copies of such documents.
(4) All contracts, including those for amounts less than the simplified acquisition threshold, awarded by recipients and their contractors must contain the procurement provisions of Appendix B to this subpart, as applicable.
(d) Recipient responsibilities. The recipient is the responsible authority, without recourse to DOE, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of an award. This includes disputes, claims, protests of award, source evaluation or other matters of a contractual nature. The recipient should refer matters concerning violations of statutes to such Federal, State or local authority as may have proper jurisdiction.
Reports and Records

§ 600.340 Purpose of reports and records. Sections 600.341 and 600.342 prescribe requirements for monitoring and reporting financial and program performance and for records retention.

§ 600.341 Monitoring and reporting program and financial performance. (a) The terms and conditions of the award prescribe the reporting requirements, the frequency, and the due dates for reports
s and Records

§ 600.340 Purpose of reports and records. Sections 600.341 and 600.342 prescribe requirements for monitoring and reporting financial and program performance and for records retention.

§ 600.341 Monitoring and reporting program and financial performance. (a) The terms and conditions of the award prescribe the reporting requirements, the frequency, and the due dates for reports. At a minimum, requirements must include:
(1) Periodic progress reports (at least annually, but no more frequently than quarterly) addressing both program status and business status, as follows:
(i) The program portions of the reports must address progress toward achieving program performance goals and milestones, including current issues, problems, or developments.
(ii) The business portions of the reports must provide summarized details on the status of resources (federal funds and non-federal cost sharing or matching), including an accounting of expenditures for the period covered by the report. The report should compare the resource status with any payment and expenditure schedules or plans provided in the original award, explain any major deviations from those schedules, and discuss actions that will be taken to address the deviations.
(2) A final technical report if the award is for research and development.
(b) If the contracting officer previously authorized advance payments, pursuant to § 600.312(a)(2), he/she should consult with the DOE project director and consider whether program progress reported in the periodic progress report, in relation to reported expenditures, is sufficient to justify continued authorization of advance payments.

§ 600.342 Retention and access requirements for records. (a) This section sets forth requirements for records retention and access to records for awards to recipients and subrecipients.
DOE project director and consider whether program progress reported in the periodic progress report, in relation to reported expenditures, is sufficient to justify continued authorization of advance payments.

§ 600.342 Retention and access requirements for records. (a) This section sets forth requirements for records retention and access to records for awards to recipients and subrecipients.
(b) Financial records, supporting documents, statistical records, and all
(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken.
(2) Records for real property and equipment acquired with Federal funds must be retained for 3 years after final disposition.
(3) If records are transferred to or maintained by DOE, the 3-year retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocation plans, and related records must be retained in accordance with the requirements specified in paragraph (g) of this section.
(c) Copies of original records may be substituted for the original records if authorized by the contracting officer.
(d) The contracting officer may request that recipients transfer certain records to DOE custody if he or she determines that the records possess long term retention value. However, in order to avoid duplicate recordkeeping, a contracting officer may make arrangements for recipients to retain any records that are continuously needed for joint use.
ecords if authorized by the contracting officer.
(d) The contracting officer may request that recipients transfer certain records to DOE custody if he or she determines that the records possess long term retention value. However, in order to avoid duplicate recordkeeping, a contracting officer may make arrangements for recipients to retain any records that are continuously needed for joint use.
(e) DOE, the Inspector General, Comptroller General of the United States, or any of their duly authorized representatives, have the right of timely and unrestricted access to any books, documents, papers, or other records of recipients that are pertinent to the awards, in order to make audits, examinations, excerpts, transcripts and copies of such documents. This right also includes timely and reasonable access to a recipient's personnel for the purpose of interview and discussion related to such documents. The rights of access in this paragraph are not limited to the required retention period, but must last as long as records are retained.
(f) Unless required by statute, DOE must not place restrictions on recipients that limit public access to the records of recipients that are pertinent to an award, except when DOE can demonstrate that such records would be kept confidential and would be exempt from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records belonged to DOE.
(g) Indirect cost proposals, cost allocation plans, and other cost accounting documents (such as documents related to computer usage chargeback rates), along with their supporting records, must be retained for a 3-year period, as follows:
(1) If the recipient or the subrecipient is required to submit an indirect-cost proposal, cost allocation plan, or other computation to the cognizant Federal agency for purposes of negotiating an indirect cost rate or other rates, the 3-year retention period starts on the date of the submission.
eback rates), along with their supporting records, must be retained for a 3-year period, as follows:
(1) If the recipient or the subrecipient is required to submit an indirect-cost proposal, cost allocation plan, or other computation to the cognizant Federal agency for purposes of negotiating an indirect cost rate or other rates, the 3-year retention period starts on the date of the submission.
(2) If the recipient or the subrecipient is not required to submit the documents or supporting records for negotiating an indirect cost rate or other rates, the 3-year retention period for the documents and records starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation.
(h) If the information described in this section is maintained on a computer, recipients must retain the computer data on a reliable medium for the time periods prescribed. Recipients may transfer computer data in machine readable form from one reliable computer medium to another. Recipients' computer data retention and transfer procedures must maintain the integrity, reliability, and security of the original computer data. Recipients must also maintain an audit trail describing the data transfer. For the record retention time periods prescribed in this section, recipients must not destroy, discard, delete, or write over such computer data.
Termination and Enforcement

§ 600.350 Purpose of termination and enforcement. Sections 600.351 through 600.353 set forth uniform procedures for suspension, termination, enforcement, and disputes.

§ 600.351 Termination. (a) Awards may be terminated in whole or in part only in accordance with one of the following:
(1) By the contracting officer, if a recipient materially fails to comply with the terms and conditions of an award.
Purpose of termination and enforcement. Sections 600.351 through 600.353 set forth uniform procedures for suspension, terminat

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

## Nearby sections

- [67 FR 25 Fees for Official Inspection and Official Weighing Services](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_01-32154.md)
- [67 FR 33 Airworthiness Directives; Dassault Model Mystere-Falcon 50 Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_01-32194.md)
- [67 FR 534 Airworthiness Directives; McDonnell Douglas MD-90-30 Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-202.md)
- [67 FR 542 Airworthiness Directives; McDonnell Douglas Model MD-90-30 Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-206.md)
- [67 FR 544 Airworthiness Directives; Boeing Model 747-100, -100B, -100B SUD, -200B, -200C, -200F, -300, -400, -400D, and -400F Series Airplanes; and Model 747SR Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-207.md)
- [67 FR 550 Airworthiness Directives; McDonnell Douglas Model DC-10-10, -10F, -15, -30, -30F (KC-10A and KDC-10), -40, and -40F Series Airplanes; and Model MD-10-10F and MD-10-30F Series Airplanes](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-209.md)
- [67 FR 632 Federal Acquisition Regulation; Hazardous Material Safety Data](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-117.md)
- [67 FR 700 Airworthiness Directives; Pratt & Whitney JT8D-200 Series Turbofan Engines](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-304.md)
- [67 FR 704 Proposed Modification of Class E Airspace; Manistee, MI](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-251.md)
- [67 FR 713 Automotive Fuel Economy Manufacturing Incentives for Alternative Fuel Vehicles](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_01-32260.md)
- [67 FR 849 Honey Research, Promotion, and Consumer Information Order; Continuance Referendum](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-449.md)
- [67 FR 1167 Airworthiness Directives; Boeing Model 747 Series Airplanes Powered by General Electric (GE) CF6-45/50, Pratt & Whitney (P&W) JT9D-70, or JT9D-7 Series Engines](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-457.md)
- [67 FR 1325 Groundfish Fisheries of the Bering Sea and Aleutian Islands Area and the Gulf of Alaska, King and Tanner Crab Fisheries in the Bering Sea/Aleutian Islands, Scallop and Salmon Fisheries Off the Coast of Alaska](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-644.md)
- [67 FR 1421 Disclosure of Returns and Return Information by Other Agencies; Correction](https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-660.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FR_PRORULE_02-20967. Check the current official text before relying on it. Not legal advice.