[Federal Register: April 27, 2000 (Volume 65, Number 82)]
[Proposed Rules]
[Page 24767-24786]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ap00-18]
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Part IV
Social Security Administration
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20 CFR Part 435
Uniform Administrative Requirements for Grants and Agreements With
Institutions of Higher Education, Hospitals, Other Non-Profit
Organizations, and Commercial Organizations; Proposed Rule
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SOCIAL SECURITY ADMINISTRATION
20 CFR Part 435
RIN 0960-AE25
Uniform Administrative Requirements for Grants and Agreements
With Institutions of Higher Education, Hospitals, Other Non-Profit
Organizations, and Commercial Organizations
AGENCY: Social Security Administration (SSA).
ACTION: Notice of Proposed Rule Making (NPRM).
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SUMMARY: The proposed rule would create a new Part in the Code of
Federal Regulations. The new part would provide standards in the
administration of grants and agreements with institutions of higher
education, hospitals, other non-profit organizations, and commercial
organizations.
The Social Security Independence and Program Improvements Act of
1994, enacted August 15, 1994, established SSA as an independent agency
separate from the Department of Health and Human Services (HHS),
effective March 31, 1995. To implement its own set of grants
regulations, SSA proposes to codify almost verbatim the text of the
Office of Management and Budget (OMB) Circular Number A-110 ``Uniform
Administrative Requirements for Grants and Agreements with Institutions
of Higher Education, Hospitals, and Other Non-profit Organizations.''
These regulations would establish SSA grants regulations, separate from
the HHS regulations. We plan to publish additional regulations on the
subject of grants at a future date.
DATES: To be sure your comments are considered, we must receive them no
later than June 26, 2000.
ADDRESSES: Comments should be submitted in writing to the Commissioner
of Social Security, P.O. Box 1585, Baltimore, Maryland 21235-6401.
Comments may be sent by telefax to (410) 966-2830, sent by E-mail to
``regulations@ssa.gov,'' or delivered to the Social Security
Administration, 2109 West Low Rise Building, 6401 Security Boulevard,
Baltimore, MD 21235-6401, between 8:00 a.m. and 4:30 p.m. on regular
business days. Comments may be inspected during these same hours by
making arrangements with the contact person shown below. The electronic
file of this document is available on the Internet at
www.access.gpo.gov/su-- docs/aces/aces140.htm at 6:00 a.m. on the date
of publication in the Federal Register. It is also available on the
Internet site for SSA (i.e., SSA Online), http://www.ssa.gov/.
FOR FURTHER INFORMATION CONTACT: E. Joe Smith, Grants Management
Officer, Office of Operations Contracts and Grants, Office of
Acquisition and Grants, SSA, 1710 Gwynn Oak Ave., Baltimore, MD 21207-
5279; telephone (410) 965-9503; fax (410) 966-9310.
SUPPLEMENTARY INFORMATION:
I. Background
OMB Circular A-110 (Circular) provides standards for obtaining
consistency and uniformity among Federal agencies in the administration
of grants and agreements with institutions of higher education,
hospitals, and other non-profit organizations. The Circular was
originally issued in 1976 and, except for a minor revision in 1987, it
remained unchanged until it was revised by OMB in 1993 (58 FR 62992).
It was subsequently amended in 1997 (62 FR 45934) and 1999 (64 FR
54926).
In 1987, OMB convened an interagency task force to update the
Circular. The work of the task force resulted in the publication of a
1988 notice in the Federal Register (53 FR 44716) proposing that the
Circular be merged with OMB Circular A-102, ``Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments'' as a consolidated ``common rule.'' The public response
led to a decision by OMB to not finalize the proposal.
In November 1990, another interagency task force was established to
revise the Circular and develop a set of common principles for the
administration of grants and agreements with institutions of higher
education, hospitals and other non-profit organizations. The task force
solicited suggestions for changes to the Circular from university
groups, non-profit organizations and other interested parties and
compared, for consistency, the provisions of similar provisions applied
to State and local governments. As a result, in August 1992, OMB
published a notice in the Federal Register (57 FR 39018) requesting
comments on proposed revisions to the Circular. OMB received over 200
comments from Federal agencies, non-profit organizations, professional
organizations and others. OMB considered all comments in developing the
final revision to the Circular. The Circular issued in 1993 reflects
the results of these efforts. The revised Circular was developed in a
model rule format to facilitate regulatory adoption by affected Federal
agencies. OMB's notice directed each affected agency to promulgate its
own rules adopting the language as it appears in the Circular unless
different provisions are required by Federal statute or are approved by
OMB (58 FR 62992-93). The notice states that OMB will review agency
regulations and implementation of the Circular and will provide
interpretations of policy requirements and assistance to insure
effective and efficient implementation. Any exceptions will be subject
to approval by OMB and will only be made in particular cases where
adequate justification is presented.
Except as provided therein, the standards set forth in the Circular
are applicable to all Federal agencies. If any statute specifically
prescribes policies or specific requirements that differ from the
standards provided in the Circular, the provisions of the statute shall
govern. Federal agencies must apply the provisions of the Circular in
making awards to the covered entities. Recipients must apply the
provisions of the Circular to subrecipients performing substantive work
under grants and agreements that are passed through or awarded by the
primary recipient, if such subrecipients are organizations that are
covered entities. The Circular does not apply to grants, contracts, or
other agreements between the Federal Government and units of State or
local governments covered by OMB Circular A-102, ``Grants and
Cooperative Agreements with State and Local Governments.'' And, it does
not apply to the Federal agencies' grants management common rule that
standardized and codified the administrative requirements Federal
agencies impose on State and local grantees. In addition, the Circular
does not cover subawards and contracts to State or local governments.
However, the Circular applies to subawards made by State and local
governments to organizations covered by the Circular. Federal agencies
may apply the provisions of the Circular to commercial organizations,
foreign governments, organizations under the jurisdiction of foreign
governments, and international organizations.
HHS applies the provisions of Circular A-110 in making awards to
institutions of higher education, hospitals, other non-profit
organizations, and commercial organizations through its regulations at
45 CFR part 74. Prior to March 31, 1995, SSA was an operating component
of HHS. As a result of Public Law 103-296, SSA became an independent
agency on
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March 31, 1995. However, pursuant to section 106(b) of that law, the
HHS regulations at 45 CFR part 74 have remained applicable to SSA. In
order to implement our own set of grant regulations, we propose to
adopt almost verbatim the text of Circular A-110. The result will be
the SSA grants administration regulations at 20 CFR part 435. HHS
regulations at 45 CFR part 74 will cease to be applicable to SSA on the
effective date of these regulations, in accordance with section 106(b)
of Public Law 103-296.
SSA's new part 435 at 20 CFR will be similar to OMB Circular A-110.
Consistent with the guidance provided in Circular A-110, this rule will
apply to SSA awards made to institutions of higher education,
hospitals, other non-profit organizations, and commercial
organizations. When appropriate, this rule will also apply to foreign
governments, organizations under the jurisdiction of foreign
governments, and international organizations. The proposed rule does
not apply to grants under programs commonly referred to as
``entitlement programs.''
As noted above, OMB directed each affected agency to promulgate its
own rules adopting the provisions of the Circular. Any exceptions or
deviations, unless required by Federal statute, require OMB approval.
Therefore, in support of OMB's desired uniformity, this proposed rule
incorporates the provisions and language of revised Circular A-110,
``Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations,'' published by OMB on November 29, 1993 (58 FR 62992),
as further amended August 29, 1997 (62 FR 45934) and November 8, 1999
(64 FR 54926).
II. Proposed Differences Between Part 435 and Circular A-110
The proposed rule contains a ``SUBPART E--DISPUTES,'' which sets
forth the SSA appeal process for disputes arising under SSA grants and
agreements. OMB Circular A-110 does not contain an appeal process for
disputes.
Also, the proposed rule contains the following clarifying language
and updates to procedures:
A. To be less generic and more agency specific, where appropriate,
the terms ``federal awarding agency(ies)'' have been replaced by
``SSA''.
B. In support of the plain language initiative, throughout the
proposed rule, the word ``shall'' has been replaced by ``must'' or
``will.'' Our reason for this change is, the term ``shall'' sounds
especially legalistic and could be open to interpretation. Also, in the
interest of making it easier for users to locate material, we have used
identifying labels for many of our first level paragraphs (i.e., a, b,
c).
C. To be consistent with section 4(11) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(11)), as amended by section 4001
of the Federal Acquisition Streamlining Act of 1994 (FASA), Pub. L.
103-355, the following updates have been made:
Sections 435.2 (definition for ``Small awards''); 435.44(e)(2),
(3), (4) and (5); 435.46; 435.48(a) (b) and (d); and Appendix A,
``Debarment and Suspension'' (paragraph 8) have been updated to replace
the term ``small purchase threshold'' with the term ``simplified
acquisition threshold.'' And, where appropriate, the current threshold
dollar amount of $100,000 is reflected (instead of $25,000).
D. According to FASA, the threshold for the requirement to include
the provision for compliance with sections 102 and 107 of the Contract
Work Hours and Safety Standards Act (40 U.S.C. 327-333) has been raised
to $100,000. This update has been made in Appendix A.
E. Under the statute commonly referred to as the Byrd Anti-Lobbying
Amendment, 31 U.S.C. 1352, the disclosure requirements apply to
organizations that apply or bid for an award exceeding $100,000 (not
$100,000 or more). This correction has been made in Appendix A.
III. Proposed Differences Between Part 435 and 45 CFR Part 74
In order to mirror the provisions and language of the Circular,
SSA's proposed 20 CFR part 435 deviates from 45 CFR part 74. Also, Part
74's Subpart E (Special Provisions for Awards to Commercial
Organizations) is not included in Part 435. We believe, however, the
omission of this subpart will not have a negative effect on the quality
and administration of the SSA grants program. The provisions of Subpart
E are not needed in Part 435. Unless SSA provides otherwise in the
terms and conditions of the award, and except where provided under the
provisions of Circular A-110, SSA will make no distinction between
awards to commercial organizations and awards to its other grantee
organizations covered by the Circular.
Additionally, Part 74's ``Subpart F-Disputes'' is not included in
the proposed rule. Instead, as noted in section II, above, the proposed
rule contains a ``SUBPART E--DISPUTES,'' which sets forth the SSA
appeal process for disputes arising under SSA grants and agreements.
Clarity of This Regulation
Executive Order 12866 and the President's memorandum of June 1,
1998, require each agency to write all rules in plain language. We
invite your comments on how to make this proposed rule easier to
understand. For example:
Have we organized the material to suit your needs?
Are the requirements in the rule clearly stated?
Does the rule contain technical language or jargon that
isn't clear?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the rule easier to understand?
Would more (but shorter) sections be better?
Could we improve clarity by adding tables, lists, or
diagrams?
What else could we do to make the rule easier to
understand?
IV. Regulatory Procedures
Executive Order 12866
We have consulted with the Office of Management and Budget (OMB)
and have determined that these proposed rules do not meet the criteria
for a significant regulatory action under Executive Order 12866. Thus,
they are not subject to OMB review.
Regulatory Flexibility Act
We certify that these proposed rules, if promulgated, will not have
a significant economic impact on a substantial number of small entities
because they merely reflect the adoption of existing grant policies and
procedures by SSA and do not promulgate any new policies or procedures
which would impact the public. Therefore, a regulatory flexibility
analysis as provided in the Regulatory Flexibility Act, as amended, is
not required.
Paperwork Reduction Act
These proposed rules contain reporting requirements in 20 CFR part
435 in Secs. 435.12, 435.22 and 435.52. However, the reporting forms
specified in these sections have already been approved by the Office of
Management and Budget and, therefore, we are not seeking approval of
the reporting requirements in these sections. The forms are as follows:
SF-269, SF-269A, SF-424, SF-270, SF-271 and SF-272.
The proposed regulation contains additional reporting and
recordkeeping requirements in the sections listed below. As required by
the Paperwork Reduction Act of 1995, we have
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submitted the information requirements to the Office of Management and
Budget (OMB) for its review. Organizations and individuals desiring to
submit comments on these requirements should direct them to the Office
of Information and Regulatory Affairs, OMB, New Executive Office
Building, Room 10235, Washington, D.C. 20503, ATTENTION: OMB Desk
Officer for SSA.
Following is a table of the reporting (Rpt) and recordkeeping (Rec-
kp) burdens imposed on the public:
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Average burden Estimated
Section No. No. of Frequency of per response annual burden
respondents response (hours) (hours)
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435.21 (Rec-kp)................................. 1 N/A 40 40
435.23 (Rec-kp)................................. 7 Monthly 1 84
435.25 (Rpt).................................... 14 Biannually 4 112
435.33 (Rpt).................................... 1 Annually 1 1
435.44 (Rpt).................................... 1 Annually 2 2
435.51 (Rpt).................................... 17 Quarterly 12 816
435.53 (Rec-kp)................................. 17 Annually 8 136
435.81 (Rpt).................................... 1 Annually 16 16
435.82 (Rpt).................................... 1 Annually 8 8
Total estimated annual burden:.............. .............. .............. .............. 1215
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The public burden includes the time it will take to understand what
is needed, gather the necessary facts, and provide the information or
maintain the specified records. If you have any comments or suggestions
on the estimates, write to the Social Security Administration, ATTN:
Reports Clearance Officer, 1-A-21 Operations Building, Baltimore, MD
21235.
SSA is soliciting comments from the public in order to:
Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques, or other forms of information technology (e.g., permitting
electronic submission of responses).''
(Catalog of Federal Domestic Assistance Program No. 96.007--Social
Security--Research and Demonstration)
List of Subjects in 20 CFR Part 435
Accounting, Administrative practice and procedure, Colleges and
universities, Grant programs--health, Grant programs--social programs,
Hospitals, Nonprofit organizations, Reporting and recordkeeping
requirements.
Dated: April 5, 2000.
Kenneth S. Apfel,
Commissioner of Social Security.
For the reasons set out in the preamble, we propose to add a new
Part 435 to Chapter III of Title 20 of the Code of Federal Regulations
to read as follows:
PART 435--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, OTHER
NON-PROFIT ORGANIZATIONS, AND COMMERCIAL ORGANIZATIONS
Subpart A--General
435.1 Purpose.
435.2 Definitions.
435.3 Effect on other issuances.
435.4 Deviations.
435.5 Subawards.
Subpart B--Pre-award Requirements
435.10 Purpose.
435.11 Pre-award policies.
435.12 Forms for applying for Federal assistance.
435.13 Debarment and suspension. [Reserved]
435.14 Special award conditions.
435.15 Metric system of measurement.
435.16 Resource Conservation and Recovery Act.
435.17 Certifications and representations.
Subpart C--Post-award Requirements
Financial and Program Management
435.20 Purpose of financial and program management.
435.21 Standards for financial management systems.
435.22 Payment.
435.23 Cost sharing or matching.
435.24 Program income.
435.25 Revision of budget and program plans.
435.26 Non-Federal audits.
435.27 Allowable costs.
435.28 Period of availability of funds.
Property Standards
435.30 Purpose of property standards.
435.31 Insurance coverage.
435.32 Real property.
435.33 Federally-owned and exempt property.
435.34 Equipment.
435.35 Supplies and other expendable property.
435.36 Intangible property.
435.37 Property trust relationship.
Procurement Standards
435.40 Purpose of procurement standards.
435.41 Recipient responsibilities.
435.42 Codes of conduct.
435.43 Competition.
435.44 Procurement procedures.
435.45 Cost and price analysis.
435.46 Procurement records.
435.47 Contract administration.
435.48 Contract provisions.
Reports and Records
435.50 Purpose of reports and records.
435.51 Monitoring and reporting program performance.
435.52 Financial reporting.
435.53 Retention and access requirements for records.
Termination and Enforcement
435.60 Purpose of termination and enforcement.
435.61 Termination.
435.62 Enforcement.
Subpart D--After-the-award Requirements
435.70 Purpose.
435.71 Closeout procedures.
435.72 Subsequent adjustments and continuing responsibilities.
435.73 Collection of amounts due.
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Subpart E--Disputes
435.80 Appeal process.
435.81 Initial appeal.
435.82 Appeal of decision of ACOAG.
Appendix A to Part 435--Contract Provisions
Authority: 5 U.S.C. 301.
Subpart A--General
Sec. 435.1 Purpose.
This Part establishes SSA's administrative requirements for SSA
grants and agreements awarded to institutions of higher education,
hospitals, other non-profit organizations, and commercial
organizations. The regulations in this part do not differ from the
uniform regulations published in OMB Circular A-110 except as provided
in Secs. 435.4 and 435.14. Non-profit organizations that implement
Federal programs for the States are also subject to State requirements.
For availability of OMB circulars, see 5 CFR 1310.3.
Sec. 435.2 Definitions.
(a) Accrued expenditures means the charges incurred by the
recipient during a given period requiring the provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients,
and other payees; and,
(3) Other amounts becoming owed under programs for which no current
services or performance is required.
(b) Accrued income means the sum of:
(1) Earnings during a given period from--
(i) Services performed by the recipient, and
(ii) Goods and other tangible property delivered to purchasers, and
(2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
(c) Acquisition cost of equipment means the net invoice price of
the equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
usable for the purpose for which it was acquired. Other charges, such
as the cost of installation, transportation, taxes, duty or protective
in-transit insurance, must be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices.
(d) Advance means a payment made by Treasury check or other
appropriate payment mechanism to a recipient upon its request either
before outlays are made by the recipient or through the use of
predetermined payment schedules.
(e) Award means financial assistance that provides support or
stimulation to accomplish a public purpose. Awards include grants and
other agreements in the form of money or property in lieu of money, by
the Federal Government to an eligible recipient. The term does not
include: technical assistance, which provides services instead of
money; other assistance in the form of loans, loan guarantees, interest
subsidies, or insurance; direct payments of any kind to individuals;
and, contracts which are required to be entered into and administered
under procurement laws and regulations.
(f) Cash contributions means the recipient's cash outlay, including
the outlay of money contributed to the recipient by third parties.
(g) Closeout means the process by which SSA determines that all
applicable administrative actions and all required work of the award
have been completed by the recipient and SSA.
(h) Contract means a procurement contract under an award or
subaward, and a procurement subcontract under a recipient's or
subrecipient's contract.
(i) Cost sharing or matching means that portion of project or
program costs not borne by the Federal government.
(j) Date of completion means the date on which all work under an
award is completed or the date on the award document, or any supplement
or amendment thereto, on which SSA sponsorship ends.
(k) Disallowed costs means those charges to an award that the
Federal awarding agency determines to be unallowable, in accordance
with the applicable Federal cost principles or other terms and
conditions contained in the award.
(l) Equipment means tangible nonexpendable personal property
including exempt property charged directly to the award having a useful
life of more than one year and an acquisition cost of $5000 or more per
unit. However, consistent with recipient policy, lower limits may be
established.
(m) Excess property means property under the control of SSA that,
as determined by the head thereof, is no longer required for its needs
or the discharge of its responsibilities.
(n) Exempt property means tangible personal property acquired in
whole or in part with Federal funds, where SSA has statutory authority
to vest title in the recipient without further obligation to the
Federal Government. An example of exempt property authority is
contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C.
6306), for property acquired under an award to conduct basic or applied
research by a non-profit institution of higher education or non-profit
organization whose principal purpose is conducting scientific research.
(o) SSA means the Federal agency that provides an award to the
recipient.
(p) Federal funds authorized means the total amount of Federal
funds obligated by the Federal Government for use by the recipient.
This amount may include any authorized carryover of unobligated funds
from prior funding periods when permitted by agency regulations or
agency implementing instructions.
(q) Federal share of real property, equipment, or supplies means
that percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
(r) Funding period means the period of time when Federal funding is
available for obligation by the recipient.
(s) Intangible property and debt instruments means, but is not
limited to, trademarks, copyrights, patents and patent applications and
such property as loans, notes and other debt instruments, lease
agreements, stock and other instruments of property ownership, whether
considered tangible or intangible.
(t) Obligations means the amounts of orders placed, contracts and
grants awarded, services received and similar transactions during a
given period that require payment by the recipient during the same or a
future period.
(u) Outlays or expenditures means charges made to the project or
program. They may be reported on a cash or accrual basis.
(1) Cash basis. For reports prepared on a cash basis, outlays are
the sum of cash disbursements for direct charges for goods and
services, the amount of indirect expense charged, the value of third
party in-kind contributions applied and the amount of cash advances and
payments made to subrecipients.
(2) Accrual basis. For reports prepared on an accrual basis,
outlays are the sum of cash disbursements for direct charges for goods
and services, the amount of indirect expense incurred, the value of in-
kind contributions applied, and the net increase (or decrease) in the
amounts owed by the recipient for goods and other property received,
for services performed by employees, contractors, subrecipients and
other payees and other amounts becoming owed under programs for which
no current services or performance are required.
(v) Personal property means property of any kind except real
property. It may
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be tangible, having physical existence, or intangible, having no
physical existence, such as copyrights, patents, or securities.
(w) Prior approval means written approval by an authorized SSA
official evidencing prior consent.
(x) Program income means gross income earned by the recipient that
is directly generated by a supported activity or earned as a result of
the award (see exclusions in Secs. 435.24(e) and (h)). Program income
includes, but is not limited to, income from fees for services
performed, the use or rental of real or personal property acquired
under federally-funded projects, the sale of commodities or items
fabricated under an award, license fees and royalties on patents and
copyrights, and interest on loans made with award funds. Interest
earned on advances of Federal funds is not program income. Except as
otherwise provided in SSA regulations or the terms and conditions of
the award, program income does not include the receipt of principal on
loans, rebates, credits, discounts, etc., or interest earned on any of
them.
(y) Project costs means all allowable costs, as set forth in the
applicable Federal cost principles, incurred by a recipient and the
value of the contributions made by third parties in accomplishing the
objectives of the award during the project period.
(z) Project period means the period established in the award
document during which Federal sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property,
equipment, intangible property and debt instruments.
(bb) Real property means land, including land improvements,
structures and appurtenances thereto, but excludes movable machinery
and equipment.
(cc) Recipient means an organization receiving financial assistance
directly from SSA to carry out a project or program. The term includes
public and private institutions of higher education, public and private
hospitals, and other quasi-public and private non-profit organizations
such as, but not limited to, community action agencies, research
institutes, educational associations, and health centers. The term may
include commercial organizations, foreign or international
organizations (such as agencies of the United Nations) which are
recipients, subrecipients, or contractors or subcontractors of
recipients or subrecipients at the discretion of SSA. The term does not
include government-owned contractor-operated facilities or research
centers providing continued support for mission-oriented, large-scale
programs that are government-owned or controlled, or are designated as
federally-funded research and development centers.
(dd) Research and development means all research activities, both
basic and applied, and all development activities that are supported at
universities, colleges, and other non-profit institutions. ``Research''
is defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. ``Development'' is
the systematic use of knowledge and understanding gained from research
directed toward the production of useful materials, devices, systems,
or methods, including design and development of prototypes and
processes. The term research also includes activities involving the
training of individuals in research techniques where such activities
utilize the same facilities as other research and development
activities and where such activities are not included in the
instruction function.
(ee) Small awards means a grant or cooperative agreement not
exceeding the simplified acquisition threshold fixed at 41 U.S.C.
403(11) (currently $100,000).
(ff) Subaward means an award of financial assistance in the form of
money, or property in lieu of money, made under an award by a recipient
to an eligible subrecipient or by a subrecipient to a lower tier
subrecipient. The term includes financial assistance when provided by
any legal agreement, even if the agreement is called a contract, but
does not include procurement of goods and services nor does it include
any form of assistance which is excluded from the definition of
``award'' in paragraph (e) of this section.
(gg) Subrecipient means the legal entity to which a subaward is
made and which is accountable to the recipient for the use of the funds
provided. The term may include foreign or international organizations
(such as agencies of the United Nations) at the discretion of the
Federal awarding agency.
(hh) Supplies means all personal property excluding equipment,
intangible property, and debt instruments as defined in this section,
and inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement
(``subject inventions''), as defined in 37 CFR part 401, ``Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms
Under Government Grants, Contracts, and Cooperative Agreements.''
(ii) Suspension means an action by SSA that temporarily withdraws
Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award by SSA.
Suspension of an award is a separate action from suspension under
Federal agency regulations implementing Executive Orders 12549 and
12689, ``Debarment and Suspension.''
(jj) Termination means the cancellation of Federal sponsorship, in
whole or in part, under an agreement at any time prior to the date of
completion.
(kk) Third party in-kind contributions means the value of non-cash
contributions provided by non-Federal third parties. Third party in-
kind contributions may be in the form of real property, equipment,
supplies and other expendable property, and the value of goods and
services directly benefiting and specifically identifiable to the
project or program.
(ll) Unliquidated obligations, for financial reports prepared on a
cash basis, means the amount of obligations incurred by the recipient
that have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the
recipient for which an outlay has not been recorded.
(mm) Unobligated balance means the portion of the funds authorized
by SSA that has not been obligated by the recipient and is determined
by deducting the cumulative obligations from the cumulative funds
authorized.
(nn) Unrecovered indirect cost means the difference between the
amount awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
(oo) Working capital advance means a procedure whereby funds are
advanced to the recipient to cover its estimated disbursement needs for
a given initial period.
Sec. 435.3 Effect on other issuances.
For awards subject to this Part, all administrative requirements of
codified program regulations, program manuals, handbooks and other
nonregulatory materials which are inconsistent with the requirements of
this Part are superseded, except to the extent they are required by
statute, or authorized in accordance with the deviations provision in
Sec. 435.4.
Sec. 435.4 Deviations.
The Office of Management and Budget (OMB) may grant exceptions for
classes of grants or recipients subject to the
[[Page 24773]]
requirements of this Part when exceptions are not prohibited by
statute. However, in the interest of maximum uniformity, exceptions
from the requirements of this Part will be permitted only in unusual
circumstances. SSA may apply more restrictive requirements to a class
of recipients when approved by OMB. SSA may apply less restrictive
requirements when awarding small awards, except for those requirements
which are statutory. Exceptions on a case-by-case basis may also be
made by SSA.
Sec. 435.5 Subawards.
Unless sections of this Part specifically exclude subrecipients
from coverage, the provisions of this Part will be applied to
subrecipients performing work under awards if such subrecipients are
institutions of higher education, hospitals, other non-profit, or
commercial organizations.
Subpart B--Pre-award Requirements
Sec. 435.10 Purpose.
Sections 435.11 through 435.17 prescribe forms and instructions and
other pre-award matters to be used in applying for Federal awards.
Sec. 435.11 Pre-award policies.
(a) Use of grants and cooperative agreements, and contracts. In
each instance, SSA will decide on the appropriate award instrument
(i.e., grant, cooperative agreement, or contract). The Federal Grant
and Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of
grants, cooperative agreements and contracts.
(1) Grants and cooperative agreements. A grant or cooperative
agreement will be used only when the principal purpose of a transaction
is to accomplish a public purpose of support or stimulation authorized
by Federal statute. The statutory criterion for choosing between grants
and cooperative agreements is that for the latter, ``substantial
involvement is expected between the executive agency and the State,
local government, or other recipient when carrying out the activity
contemplated in the agreement.''
(2) Contracts. Contracts will be used when the principal purpose is
acquisition of property or services for the direct benefit or use of
the Federal Government.
(b) Public Notice and priority setting. SSA will notify the public
of its intended funding priorities for discretionary grant programs,
unless funding priorities are established by Federal statute.
Sec. 435.12 Forms for applying for Federal assistance.
(a) SSA must comply with the applicable report clearance
requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the
Public,'' with regard to all forms used by SSA in place of or as a
supplement to the Standard Form 424 (SF-424) series.
(b) Applicants must use the SF-424 series or those forms and
instructions prescribed by SSA.
(c) For Federal programs covered by Executive Order 12372,
``Intergovernmental Review of Federal Programs'' (3 CFR, 1982 Comp., p.
197), the applicant must complete the appropriate sections of the SF-
424 (Application for Federal Assistance) indicating whether the
application was subject to review by the State Single Point of Contact
(SPOC). The name and address of the SPOC for a particular State can be
obtained from SSA or the Catalog of Federal Domestic Assistance. The
SPOC will advise the applicant whether the program for which
application is made has been selected by that State for review.
Sec. 435.13 Debarment and suspension. [Reserved]
Sec. 435.14 Special award conditions.
(a) When special conditions may apply. SSA may impose additional
requirements, as needed, if an applicant or recipient:
(1) Has a history of poor performance,
(2) Is not financially stable,
(3) Has a management system that does not meet the standards
prescribed in this Part,
(4) Has not conformed to the terms and conditions of a previous
award, or
(5) Is not otherwise responsible.
(b) Notice of special conditions. When imposing additional
requirements, SSA will notify the recipient in writing as to:
(1) The nature of the additional requirements,
(2) The reason why the additional requirements are being imposed,
(3) The nature of the corrective action needed,
(4) The time allowed for completing the corrective actions, and
(5) The method for requesting reconsideration of the additional
requirements imposed.
(c) Any special conditions will be promptly removed once the
conditions that prompted them have been corrected.
Sec. 435.15 Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is
the preferred measurement system for U.S. trade and commerce. The Act
requires each Federal agency to establish a date or dates, in
consultation with the Secretary of Commerce, when the metric system of
measurement will be used in the agency's procurements, grants, and
other business-related activities. Metric implementation may take
longer where the use of the system is initially impractical or likely
to cause significant inefficiencies in the accomplishment of federally-
funded activities. SSA follows the provisions of Executive Order 12770,
``Metric Usage in Federal Government Programs'' (3 CFR, 1991 Comp., p.
343).
Sec. 435.16 Resource Conservation and Recovery Act.
Any State agency or agency of a political subdivision of a State
which is using appropriated Federal funds must comply with section 6002
of the Resource Conservation and Recovery Act (RCRA) (Public Law 94-
580; 42 U.S.C. 6962). Section 6002 requires that preference be given in
procurement programs to the purchase of specific products containing
recycled materials identified in guidelines developed by the
Environmental Protection Agency (EPA) (40 CFR parts 247-254).
Accordingly, State and local institutions of higher education,
hospitals, and non-profit organizations that receive direct Federal
awards or other Federal funds must give preference in their procurement
programs funded with Federal funds to the purchase of recycled products
pursuant to the EPA guidelines.
Sec. 435.17 Certifications and representations.
Unless prohibited by statute or codified regulation, SSA will allow
recipients to submit certifications and representations required by
statute, executive order, or regulation on an annual basis, if the
recipients have ongoing and continuing relationships with the agency.
Annual certifications and representations must be signed by responsible
officials with the authority to ensure recipients' compliance with the
pertinent requirements.
Subpart C--Post-award Requirements
Financial and Program Management
Sec. 435.20 Purpose of financial and program management.
Sections 435.21 through 435.28 prescribe standards for financial
management systems, methods for making payments and rules for:
satisfying cost sharing and matching requirements, accounting for
program
[[Page 24774]]
income, budget revision approvals, making audits, determining
allowability of cost, and establishing fund availability.
Sec. 435.21 Standards for financial management systems.
(a) Introduction. SSA requires recipients to relate financial data
to performance data and develop unit cost information whenever
practical.
(b) Basic requirements. Recipients' financial management systems
must provide for the following:
(1) Accurate, current and complete disclosure of the financial
results of each federally-sponsored project or program in accordance
with the reporting requirements set forth in Sec. 435.52. If SSA
requires reporting on an accrual basis from a recipient that maintains
its records on other than an accrual basis, the recipient will not be
required to establish an accrual accounting system. These recipients
may develop such accrual data for its reports on the basis of an
analysis of the documentation on hand.
(2) Records that identify adequately the source and application of
funds for federally-sponsored activities. These records must contain
information pertaining to Federal awards, authorizations, obligations,
unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds,
property and other assets. Recipients must adequately safeguard all
such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the
transfer of funds to the recipient from the U.S. Treasury and the
issuance or redemption of checks, warrants or payments by other means
for program purposes by the recipient. To the extent that the
provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101-
453; 31 U.S.C. 6501) govern, payment methods of State agencies,
instrumentalities, and fiscal agents must be consistent with CMIA
Treasury-State Agreements or the CMIA default procedures codified at 31
CFR part 205, ``Withdrawal of Cash from the Treasury for Advances under
Federal Grant and Other Programs.''
(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the
provisions of the applicable Federal cost principles and the terms and
conditions of the award.
(7) Accounting records including cost accounting records that are
supported by source documentation.
(c) Bonding and insurance requirements. Where the Federal
Government guarantees or insures the repayment of money borrowed by the
recipient, SSA, at its discretion, may require adequate bonding and
insurance if the bonding and insurance requirements of the recipient
are not deemed adequate to protect the interest of the Federal
Government.
(d) Fidelity bond coverage requirements. SSA may require adequate
fidelity bond coverage where the recipient lacks sufficient coverage to
protect the Federal Government's interest.
(e) Obtaining bonds. Where bonds are required in the situations
described above, the bonds must be obtained from companies holding
certificates of authority as acceptable sureties, as prescribed in 31
CFR part 223, ``Surety Companies Doing Business with the United
States.''
Sec. 435.22 Payment.
(a) Introduction. Payment methods must minimize the time elapsing
between the transfer of funds from the United States Treasury and the
issuance or redemption of checks, warrants, or payment by other means
by the recipients. Payment methods of State agencies or
instrumentalities must be consistent with Treasury-State CMIA
agreements or default procedures codified at 31 CFR part 205.
(b) Advance payment method and requirements. (1) Recipients will be
paid in advance, provided they maintain or demonstrate the willingness
to maintain:
(i) Written procedures that minimize the time elapsing between the
transfer of funds and disbursement by the recipient, and
(ii) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 435.21.
(2) Cash advances to a recipient organization will be limited to
the minimum amounts needed and be timed to be in accordance with the
actual, immediate cash requirements of the recipient organization in
carrying out the purpose of the approved program or project. The timing
and amount of cash advances must be as close as is administratively
feasible to the actual disbursements by the recipient organization for
direct program or project costs and the proportionate share of any
allowable indirect costs.
(c) Advance payment consolidation and mechanisms. Whenever
possible, advances must be consolidated to cover anticipated cash needs
for all awards made by SSA to the recipient.
(1) Advance payment mechanisms include, but are not limited to,
Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients are authorized to submit requests for advances and
reimbursements at least monthly when electronic fund transfers are not
used.
(d) How to request advance payment. Requests for Treasury check
advance payment must be submitted on SF-270, ``Request for Advance or
Reimbursement,'' or other forms as may be authorized by OMB. This form
is not to be used when Treasury check advance payments are made to the
recipient automatically through the use of a predetermined payment
schedule or if precluded by special SSA instructions for electronic
funds transfer.
(e) Reimbursement method. Reimbursement is the preferred method
when the advance payment requirements in paragraph (b) of this section
cannot be met. SSA may also use this method on any construction
agreement, or if the major portion of the construction project is
accomplished through private market financing or Federal loans, and the
Federal assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, SSA will make payment
within 30 days after receipt of the billing, unless the billing is
improper.
(2) Recipients will be authorized to submit request for
reimbursement at least monthly when electronic funds transfers are not
used.
(f) Working capital advance method. If a recipient cannot meet the
criteria for advance payments and SSA has determined that reimbursement
is not feasible because the recipient lacks sufficient working capital,
SSA may provide cash on a working capital advance basis. Under this
procedure, SSA will advance cash to the recipient to cover its
estimated disbursement needs for an initial period generally geared to
the awardee's disbursing cycle. Thereafter, SSA will reimburse the
recipient for its actual cash disbursements. The working capital
advance method of payment will not be used for recipients unwilling or
unable to provide timely advances to their subrecipient to meet the
subrecipient's actual cash disbursements.
(g) Requesting additional cash payments. To the extent available,
recipients must disburse funds available
[[Page 24775]]
from repayments to and interest earned on a revolving fund, program
income, rebates, refunds, contract settlements, audit recoveries and
interest earned on such funds before requesting additional cash
payments.
(h) Withholding of payments. Unless otherwise required by statute,
SSA will not withhold payments for proper charges made by recipients at
any time during the project period unless paragraph (h) (1) or (2) of
this section apply.
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements.
(2) The recipient or subrecipient is delinquent in a debt to the
United States as defined in OMB Circular A-129, ``Managing Federal
Credit Programs.'' Under such conditions, SSA may, upon reasonable
notice, inform the recipient that payments will not be made for
obligations incurred after a specified date until the conditions are
corrected or the indebtedness to the Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as
depositories of funds advanced under awards. (1) Except for situations
described in paragraph (i)(2) of this section, SSA will not require
separate depository accounts for funds provided to a recipient or
establish any eligibility requirements for depositories for funds
provided to a recipient. However, recipients must be able to account
for the receipt, obligation and expenditure of funds.
(2) Advances of Federal funds must be deposited and maintained in
insured accounts whenever possible.
(j) Use of women-owned and minority-owned banks. Consistent with
the national goal of expanding the opportunities for women-owned and
minority-owned business enterprises, recipients will be encouraged to
use women-owned and minority-owned banks (a bank which is owned at
least 50 percent by women or minority group members).
(k) Use of interest bearing accounts. Recipients must maintain
advances of Federal funds in interest bearing accounts, unless
paragraph (k) (1), (2) or (3) of this section apply.
(1) The recipient receives less than $120,000 in Federal awards per
year.
(2) The best reasonably available interest bearing account would
not be expected to earn interest in excess of $250 per year on Federal
cash balances.
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
(l) Remittance of interest earned. For those entities where CMIA
and its implementing regulations do not apply, interest earned on
Federal advances deposited in interest bearing accounts must be
remitted annually to Department of Health and Human Services, Payment
Management System, Rockville, MD 20852. Interest amounts up to $250 per
year may be retained by the recipient for administrative expense. State
universities and hospitals must comply with CMIA, as it pertains to
interest. If an entity subject to CMIA uses its own funds to pay pre-
award costs for discretionary awards without prior written approval
from SSA, it waives its right to recover the interest under CMIA.
(m) Forms for requesting advances and reimbursements. Except as
noted elsewhere in this Part, only the following forms are authorized
for the recipients in requesting advances and reimbursements. SSA will
not require more than an original and two copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. SSA has adopted
the SF-270 as a standard form for all nonconstruction programs when
electronic funds transfer or predetermined advance methods are not
used. SSA, however, has the option of using this form for construction
programs in lieu of the SF-271, ``Outlay Report and Request for
Reimbursement for Construction Programs.''
(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. SSA has adopted the SF-271 as the standard form
to be used for requesting reimbursement for construction programs.
However, SSA may substitute the SF-270 when SSA determines that it
provides adequate information to meet Federal needs.
Sec. 435.23 Cost sharing or matching.
(a) All contributions, including cash and third party in-kind, will
be accepted as part of the recipient's cost sharing or matching when
such contributions meet all of the following criteria:
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-
assisted project or program.
(3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award,
except where authorized by Federal statute to be used for cost sharing
or matching.
(6) Are provided for in the approved budget when required by SSA.
(7) Conform to other provisions of this Part, as applicable.
(b) Unrecovered indirect costs may be included as part of cost
sharing or matching only with the prior approval of SSA.
(c) Values for recipient contributions of services and property
will be established in accordance with the applicable cost principles.
If SSA authorizes recipients to donate buildings or land for
construction/facilities acquisition projects or long-term use, the
value of the donated property for cost sharing or matching will be the
lesser of paragraph (c)(1) or (2) of this section.
(1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation.
(2) The current fair market value. However, when there is
sufficient justification, SSA may approve the use of the current fair
market value of the donated property, even if it exceeds the certified
value at the time of donation to the project.
(d) Volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor may be
counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. Rates for volunteer
services must be consistent with those paid for similar work in the
recipient's organization. In those instances in which the required
skills are not found in the recipient organization, rates must be
consistent with those paid for similar work in the labor market in
which the recipient competes for the kind of services involved. In
either case, paid fringe benefits that are reasonable, allowable, and
allocable may be included in the valuation.
(e) When an employer other than the recipient furnishes the
services of an employee, these services must be valued at the
employee's regular rate of pay (plus an amount of fringe benefits that
are reasonable, allowable, and allocable, but exclusive of overhead
costs), provided these services are in the same skill for which the
employee is normally paid.
(f) Donated supplies may include such items as expendable
equipment, office supplies, laboratory supplies or workshop and
classroom supplies. Value assessed to donated supplies included in the
cost sharing or matching
[[Page 24776]]
share must be reasonable and may not exceed the fair market value of
the property at the time of the donation.
(g) The method used for determining cost sharing or matching for
donated equipment, buildings and land for which title passes to the
recipient may differ according to the purpose of the award, if
paragraph (g)(1) or (2) of this section apply.
(1) If the purpose of the award is to assist the recipient in the
acquisition of equipment, buildings or land, the total value of the
donated property may be claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities that
require the use of equipment, buildings or land, normally only
depreciation or use charges for equipment and buildings may be made.
However, the full value of equipment or other capital assets and fair
rental charges for land may be allowed, provided that SSA has approved
the charges.
(h) The value of donated property must be determined in accordance
with the usual accounting policies of the recipient, with the following
qualifications:
(1) The value of donated land and buildings may not exceed its fair
market value at the time of donation to the recipient as established by
an independent appraiser (e.g., certified real property appraiser or
General Services Administration representative) and certified by a
responsible official of the recipient.
(2) The value of donated equipment may not exceed the fair market
value of equipment of the same age and condition at the time of
donation.
(3) The value of donated space may not exceed the fair rental value
of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
(4) The value of loaned equipment may not exceed its fair rental
value.
(5) The following requirements pertain to the recipient's
supporting records for in-kind contributions from third parties:
(i) Volunteer services must be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(ii) The basis for determining the valuation for personal service,
material, equipment, buildings and land must be documented.
Sec. 435.24 Program income.
(a) Introduction. SSA will apply the standards set forth in this
section in requiring recipient organizations to account for program
income related to projects financed in whole or in part with Federal
funds.
(b) Use of program income. Except as provided in paragraph (h) of
this section, program income earned during the project period must be
retained by the recipient and, in accordance with SSA regulations or
the terms and conditions of the award, must be used in one or more of
the following ways. Program income must be:
(1) Added to funds committed to the project by the Federal awarding
agency and recipient and used to further eligible project or program
objectives.
(2) Used to finance the non-Federal share of the project or
program.
(3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs
is based.
(c) Use of excess program income. When an agency authorizes the
disposition of program income as described in paragraph (b)(1) or
(b)(2) of this section, program income in excess of any limits
stipulated must be used in accordance with paragraph (b)(3) of this
section.
(d) When the use of program income is not specified. In the event
that SSA does not specify in its regulations or the terms and
conditions of the award how program income is to be used, paragraph
(b)(3) of this section will apply automatically to all projects or
programs except research. For awards that support research, paragraph
(b)(1) of this section will apply automatically unless SSA indicates in
the terms and conditions another alternative on the award or the
recipient is subject to special award conditions, as indicated in
Sec. 435.14.
(e) Program income earned after end of project period. Unless SSA
regulations or the terms and conditions of the award provide otherwise,
recipients will have no obligation to the Federal Government regarding
program income earned after the end of the project period.
(f) Costs incident to generation of program income. If authorized
by SSA regulations or the terms and conditions of the award, costs
incident to the generation of program income may be deducted from gross
income to determine program income, provided these costs have not been
charged to the award.
(g) Proceeds from sale of property. Proceeds from the sale of
property must be handled in accordance with the requirements of the
Property Standards (See Secs. 435.30 through 435.37).
(h) Program income from license fees and royalties. Unless SSA
regulations or the terms and condition of the award provide otherwise,
recipients have no obligation to the Federal Government with respect to
program income earned from license fees and royalties for copyrighted
material, patents, patent applications, trademarks, and inventions
produced under an award. However, Patent and Trademark Amendments (35
U.S.C. 18) apply to inventions made under an experimental,
developmental, or research award.
Sec. 435.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
Federal and non-Federal share, or only the Federal share, depending
upon SSA requirements. It must be related to performance for program
evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions, in accordance with this section.
(c) For nonconstruction awards, recipients must request prior
approvals from SSA for one or more of the following program or budget
related reasons:
(1) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
(2) Change in a key person specified in the application or award
document.
(3) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa, if approval is required by
SSA.
(6) The inclusion, unless waived by SSA, of costs that require
prior approval in accordance with OMB Circular A-21, ``Cost Principles
for Educational Institutions,'' OMB Circular A-122, ``Cost Principles
for Non-Profit Organizations,'' or 45 CFR part 74 Appendix E,
``Principles for Determining Costs Applicable to Research and
Development under Grants and Contracts with Hospitals,'' or 48 CFR part
31, ``Contract Cost Principles and Procedures,'' as applicable.
(7) The transfer of funds allotted for training allowances (direct
payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved
awards, the subaward, transfer or
[[Page 24777]]
contracting out of any work under an award. This provision does not
apply to the purchase of supplies, material, equipment or general
support services.
(d) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1) and (c)(4)
of this section, SSA may waive cost-related and administrative prior
written approvals required by this Part and OMB Circulars A-21 and A-
122. Such waivers may include authorizing recipients to do any one or
more of the following:
(1) Incur pre-award costs 90 calendar days prior to award or more
than 90 calendar days with the prior approval of SSA. All pre-award
costs are incurred at the recipient's risk (i.e., SSA is under no
obligation to reimburse such costs if for any reason the recipient does
not receive an award or if the award is less than anticipated and
inadequate to cover such costs).
(2) Initiate a one-time extension of the expiration date of the
award of up to 12 months unless one or more of the following conditions
apply. For one-time extensions, the recipient must notify SSA in
writing with the supporting reasons and revised expiration date at
least 10 days before the expiration date specified in the award. This
one-time extension may not be exercised merely for the purpose of using
unobligated balances.
(i) The terms and conditions of award prohibit the extension.
(ii) The extension requires additional Federal funds.
(iii) The extension involves any change in the approved objectives
or scope of the project.
(3) Carry forward unobligated balances to subsequent funding
periods.
(4) For awards that support research, unless SSA provides otherwise
in the award or in the SSA regulations, the prior approval requirements
described in paragraph (e) of this section are automatically waived
(i.e., recipients need not obtain such prior approvals) unless one of
the conditions included in paragraph (e)(2) of this section applies.
(f) SSA may, at its option, restrict the transfer of funds among
direct cost categories or programs, functions and activities for awards
in which the Federal share of the project exceeds $100,000 and the
cumulative amount of such transfers exceeds or is expected to exceed 10
percent of the total budget as last approved by SSA. No transfers are
permitted that would cause any Federal appropriation or part thereof to
be used for purposes other than those consistent with the original
intent of the appropriation.
(g) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j) of this section, do not require
prior approval.
(h) For construction awards, recipients must request prior written
approval promptly from SSA for budget revisions whenever paragraph
(h)(1), (2) or (3) of this section apply.
(1) The revision results from changes in the scope or the objective
of the project or program.
(2) The need arises for additional Federal funds to complete the
project.
(3) A revision is desired which involves specific costs for which
prior written approval requirements may be imposed consistent with
applicable OMB cost principles listed in Sec. 435.27.
(i) No other prior approval requirements for specific items will be
imposed unless a deviation has been approved by OMB.
(j) When SSA makes an award that provides support for both
construction and nonconstruction work, SSA may require the recipient to
request prior approval before making any fund or budget transfers
between the two types of work supported.
(k) For both construction and nonconstruction awards, recipients
must notify SSA in writing promptly whenever the amount of Federal
authorized funds is expected to exceed the needs of the recipient for
the project period by more than $5000 or five percent of the Federal
award, whichever is greater. This notification is not required if an
application for additional funding is submitted for a continuation
award.
(l) When requesting approval for budget revisions, recipients must
use the budget forms that were used in the application unless SSA
indicates a letter of request suffices.
(m) Within 30 calendar days from the date of receipt of the request
for budget revisions, SSA will review the request and notify the
recipient whether the budget revisions have been approved. If the
revision is still under consideration at the end of 30 calendar days,
SSA will inform the recipient in writing of the date when the recipient
may expect the decision.
Sec. 435.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations (including hospitals) are
subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-
133, ``Audits of States, Local Governments, and Non-Profit
Organizations.''
(b) State and local governments are subject to the audit
requirements contained in the Single Audit Act Amendments of 1996 (31
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States,
Local Governments, and Non-Profit Organizations.''
(c) For-profit hospitals not covered by the audit provisions of
revised OMB Circular A-133 are subject to the audit requirements of
SSA.
(d) Commercial organizations are subject to the audit requirements
of SSA or the prime recipient as incorporated into the award document.
Sec. 435.27 Allowable costs.
For each kind of recipient, there is a set of Federal principles
for determining allowable costs. Allowability of costs will be
determined in accordance with the cost principles applicable to the
entity incurring the costs. Thus:
(a) Allowability of costs incurred by State, local or federally-
recognized Indian tribal governments is determined in accordance with
the provisions of OMB Circular A-87, ``Cost Principles for State,
Local, and Indian Tribal Governments.''
(b) Allowability of costs incurred by non-profit organizations is
determined in accordance with the provisions of OMB Circular A-122,
``Cost Principles for Non-Profit Organizations.''
(c) Allowability of costs incurred by institutions of higher
education is determined in accordance with the provisions of OMB
Circular A-21, ``Cost Principles for Educational Institutions.''
(d) Allowability of costs incurred by hospitals is determined in
accordance with the provisions of Appendix E of 45 CFR part 74,
``Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals.''
(e) Allowability of costs incurred by commercial organizations and
those non-profit organizations listed in Attachment C to Circular A-122
is determined in accordance with the provisions of the Federal
Acquisition Regulation (FAR) at 48 CFR part 31.
Sec. 435.28 Period of availability of funds.
Where a funding period is specified, a recipient may charge to the
grant only allowable costs resulting from obligations incurred during
the funding period and any pre-award costs authorized by SSA.
[[Page 24778]]
Property Standards
Sec. 435.30 Purpose of property standards.
Sections 435.31 through 435.37 set forth uniform standards
governing management and disposition of property furnished by the
Federal Government whose cost was charged to a project supported by a
Federal award. Recipients must observe these standards under awards and
SSA may not impose additional requirements, unless specifically
required by Federal statute. The recipient may use its own property
management standards and procedures provided it observes the provisions
of Secs. 435.31 through 435.37.
Sec. 435.31 Insurance coverage.
Recipients must, at a minimum, provide the equivalent insurance
coverage for real property and equipment acquired with Federal funds as
provided to property owned by the recipient. Federally-owned property
need not be insured unless required by the terms and conditions of the
award.
Sec. 435.32 Real property.
SSA will prescribe requirements for recipients concerning the use
and disposition of real property acquired in whole or in part under
awards. Unless otherwise provided by statute, such requirements, at a
minimum, will contain the following.
(a) Title. Title to real property will vest in the recipient
subject to the condition that the recipient will use the real property
for the authorized purpose of the project as long as it is needed and
will not encumber the property without approval of SSA.
(b) Use in other projects. The recipient must obtain written
approval by SSA for the use of real property in other federally-
sponsored projects when the recipient determines that the property is
no longer needed for the purpose of the original project. Use in other
projects is limited to those under federally-sponsored projects (i.e.,
awards) or programs that have purposes consistent with those authorized
for support by SSA.
(c) Disposition. When the real property is no longer needed as
provided in paragraphs (a) and (b) of this section, the recipient must
request disposition instructions from SSA or its successor Federal
awarding agency. SSA will observe one or more of the following
disposition instructions:
(1) The recipient may be permitted to retain title without further
obligation to the Federal Government after it compensates the Federal
Government for that percentage of the current fair market value of the
property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under
guidelines provided by SSA and pay the Federal Government for that
percentage of the current fair market value of the property
attributable to the Federal participation in the project (after
deducting actual and reasonable selling and fix-up expenses, if any,
from the sales proceeds). When the recipient is authorized or required
to sell the property, proper sales procedures will be established that
provide for competition to the extent practicable and result in the
highest possible return.
(3) The recipient may be directed to transfer title to the property
to the Federal Government or to an eligible third party provided that,
in such cases, the recipient will be entitled to compensation for its
attributable percentage of the current fair market value of the
property.
Sec. 435.33 Federally-owned and exempt property.
(a) Federally-owned property. (1) Title to federally-owned property
remains vested in the Federal Government. Recipients must submit
annually an inventory listing of federally-owned property in their
custody to SSA. Upon completion of the award or when the property is no
longer needed, the recipient must report the property to SSA for
further Federal agency utilization.
(2) If SSA has no further need for the property, it will be
declared excess and reported to the General Services Administration,
unless SSA has statutory authority to dispose of the property by
alternative methods (e.g., the authority provided by the Federal
Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research
equipment to educational and non-profit organizations in accordance
with Executive Order 12821, ``Improving Mathematics and Science
Education in Support of the National Education Goals'' (3 CFR, 1992
Comp., p. 323). Appropriate instructions will be issued to the
recipient by SSA.
(b) Exempt property. When statutory authority exists, SSA has the
option to vest title to property acquired with Federal funds in the
recipient without further obligation to the Federal Government and
under conditions SSA considers appropriate. Such property is ``exempt
property.'' Should SSA not establish conditions, title to exempt
property upon acquisition will vest in the recipient without further
obligation to the Federal Government.
Sec. 435.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds
will vest in the recipient, subject to conditions of this section.
(b) The recipient may not use equipment acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute, for as long as the Federal
Government retains an interest in the equipment.
(c) The recipient may use the equipment in the project or program
for which it was acquired as long as needed, whether or not the project
or program continues to be supported by Federal funds and may not
encumber the property without approval of SSA. When no longer needed
for the original project or program, the recipient must use the
equipment in connection with its other federally-sponsored activities,
in the following order of priority:
(1) Activities sponsored by SSA, then
(2) activities sponsored by other Federal awarding agencies.
(d) During the time that equipment is used on the project or
program for which it was acquired, the recipient must make it available
for use on other projects or programs if such other use will not
interfere with the work on the project or program for which the
equipment was originally acquired. First preference for such other use
must be given to other projects or programs sponsored by SSA; second
preference must be given to projects or programs sponsored by other
Federal awarding agencies. If the equipment is owned by the Federal
Government, use on other activities not sponsored by the Federal
Government will be permissible if authorized by SSA. User charges will
be treated as program income.
(e) When acquiring replacement equipment, the recipient may use the
equipment to be replaced as trade-in or sell the equipment and use the
proceeds to offset the costs of the replacement equipment subject to
the approval of SSA.
(f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned equipment must include
all of the following:
(1) Equipment records must be maintained accurately and must
include the following information:
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
[[Page 24779]]
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal
Government.
(v) Acquisition date (or date received, if the equipment was
furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of
Federal participation in the cost of the equipment (not applicable to
equipment furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and
sales price or the method used to determine current fair market value
where a recipient compensates the Federal awarding agency for its
share.
(2) Equipment owned by the Federal Government must be identified to
indicate Federal ownership.
(3) A physical inventory of equipment must be taken and the results
reconciled with the equipment records at least once every two years.
Any differences between quantities determined by the physical
inspection and those shown in the accounting records must be
investigated to determine the causes of the difference. The recipient
must, in connection with the inventory, verify the existence, current
utilization, and continued need for the equipment.
(4) A control system must be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment. Any
loss, damage, or theft of equipment must be investigated and fully
documented; if the equipment was owned by the Federal Government, the
recipient must promptly notify SSA.
(5) Adequate maintenance procedures must be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized or required to sell the
equipment, proper sales procedures must be established which provide
for competition to the extent practicable and result in the highest
possible return.
(g) When the recipient no longer needs the equipment, the equipment
may be used for other activities in accordance with the following
standards. For equipment with a current per unit fair market value of
$5000 or more, the recipient may retain the equipment for other uses
provided that compensation is made to SSA or its successor. The amount
of compensation will be computed by applying the percentage of Federal
participation in the cost of the original project or program to the
current fair market value of the equipment. If the recipient has no
need for the equipment, the recipient must request disposition
instructions from SSA. SSA will determine whether the equipment can be
used to meet the agency's requirements. If no requirement exists within
that agency, the availability of the equipment will be reported to the
General Services Administration by SSA to determine whether a
requirement for the equipment exists in other Federal agencies. SSA
will issue instructions to the recipient no later than 120 calendar
days after the recipient's request and the following procedures will
govern:
(1) If so instructed or if disposition instructions are not issued
within 120 calendar days after the recipient's request, the recipient
must sell the equipment and reimburse SSA an amount computed by
applying to the sales proceeds the percentage of Federal participation
in the cost of the original project or program. However, the recipient
is permitted to deduct and retain from the Federal share $500 or ten
percent of the proceeds, whichever is less, for the recipient's selling
and handling expenses.
(2) If the recipient is instructed to ship the equipment elsewhere,
the recipient will be reimbursed by the Federal Government by an amount
which is computed by applying the percentage of the recipient's
participation in the cost of the original project or program to the
current fair market value of the equipment, plus any reasonable
shipping or interim storage costs incurred.
(3) If the recipient is instructed to otherwise dispose of the
equipment, the recipient will be reimbursed by SSA for such costs
incurred in its disposition.
(4) SSA may reserve the right to transfer the title to the Federal
Government or to a third party named by the Federal Government when
such third party is otherwise eligible under existing statutes. Such a
transfer will be subject to the following standards:
(i) The equipment must be appropriately identified in the award or
otherwise made known to the recipient in writing.
(ii) SSA must issue disposition instructions within 120 calendar
days after receipt of a final inventory. The final inventory must list
all equipment acquired with grant funds and federally-owned equipment.
If SSA fails to issue disposition instructions within the 120 calendar
day period, the recipient must apply the standards of this section, as
appropriate.
(iii) When SSA exercises its right to take title, the equipment
will be subject to the provisions for federally-owned equipment.
Sec. 435.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property will vest in
the recipient upon acquisition. If there is a residual inventory of
unused supplies exceeding $5000 in total aggregate value upon
termination or completion of the project or program and the supplies
are not needed for any other federally-sponsored project or program,
the recipient may retain the supplies for use on non-Federal sponsored
activities or sell them, but must, in either case, compensate the
Federal Government for its share. The amount of compensation will be
computed in the same manner as for equipment.
(b) The recipient may not use supplies acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal
Government retains an interest in the supplies.
Sec. 435.36 Intangible property.
(a) Copyright. The recipient may copyright any work that is subject
to copyright and was developed, or for which ownership was purchased,
under an award. SSA reserves a royalty-free, nonexclusive and
irrevocable right to reproduce, publish, or otherwise use the work for
Federal purposes, and to authorize others to do so.
(b) Patents and inventions. Recipients are subject to applicable
regulations governing patents and inventions, including government-wide
regulations issued by the Department of Commerce at 37 CFR part 401,
``Rights to Inventions Made by Nonprofit Organizations and Small
Business Firms Under Government Grants, Contracts and Cooperative
Agreements.''
(c) Rights of Federal Government. The Federal Government has the
right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under an award; and
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d) FOIA requests for research data. (1) In addition, in response
to a Freedom of Information Act (FOIA) request for research data
relating to published research findings produced under an award that
were used by the Federal Government in developing an agency action that
has the force and effect of law, SSA shall request, and the recipient
shall provide, within a reasonable time, the research data so that they
can be made available to the public through the procedures
[[Page 24780]]
established under the FOIA. If SSA obtains the research data solely in
response to a FOIA request, SSA may charge the requester a reasonable
fee equaling the full incremental cost of obtaining the research data.
This fee should reflect costs incurred by SSA, the recipient, and
applicable subrecipients. This fee is in addition to any fees SSA may
assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
(2) The following definitions apply for purposes of this paragraph
(d):
(i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews,
or communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
(A) Trade secrets, commercial information, materials necessary to
be held confidential by a researcher until they are published, or
similar information which is protected under law; and
(B) Personnel and medical information and similar information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific
or technical journal; or
(B) A Federal agency publicly and officially cites the research
findings in support of an agency action that has the force and effect
of law.
(iii) Used by the Federal Government in developing an agency action
that has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support of an
agency action that has the force and effect of law.
(e) Title to intangible property and debt instruments. Title to
intangible property and debt instruments acquired under an award or
subaward vests upon acquisition in the recipient. The recipient must
use that property for the originally-authorized purpose, and the
recipient may not encumber the property without approval of SSA. When
no longer needed for the originally authorized purpose, disposition of
the intangible property will occur in accordance with the provisions of
Sec. 435.34(g).
Sec. 435.37 Property trust relationship.
Real property, equipment, intangible property and debt instruments
that are acquired or improved with Federal funds must be held in trust
by the recipient as trustee for the beneficiaries of the project or
program under which the property was acquired or improved. Agencies may
require recipients to record liens or other appropriate notices of
record to indicate that personal or real property has been acquired or
improved with Federal funds and that use and disposition conditions
apply to the property.
Procurement Standards
Sec. 435.40 Purpose of procurement standards.
Sections 435.41 through 435.48 set forth standards for use by
recipients in establishing procedures for the procurement of supplies
and other expendable property, equipment, real property and other
services with Federal funds. These standards are furnished to ensure
that such materials and services are obtained in an effective manner
and in compliance with the provisions of applicable Federal statutes
and executive orders. No additional procurement standards or
requirements may be imposed by SSA upon recipients, unless specifically
required by Federal statute or executive order or approved by OMB.
Sec. 435.41 Recipient responsibilities.
The standards contained in this section do not relieve the
recipient of the contractual responsibilities arising under its
contract(s). The recipient is the responsible authority, without
recourse to SSA, regarding the settlement and satisfaction of all
contractual and administrative issues arising out of procurements
entered into in support of an award or other agreement. This includes
disputes, claims, protests of award, source evaluation or other matters
of a contractual nature. Matters concerning violation of statute are to
be referred to such Federal, State or local authority as may have
proper jurisdiction.
Sec. 435.42 Codes of conduct.
The recipient must maintain written standards of conduct governing
the performance of its employees engaged in the award and
administration of contracts. No employee, officer, or agent may
participate in the selection, award, or administration of a contract
supported by Federal funds if a real or apparent conflict of interest
would be involved. Such a conflict would arise when the employee,
officer, or agent, any member of his or her immediate family, his or
her partner, or an organization which employs or is about to employ any
of the parties indicated herein, has a financial or other interest in
the firm selected for an award. The officers, employees, and agents of
the recipient may neither solicit nor accept gratuities, favors, or
anything of monetary value from contractors, or parties to
subagreements. However, recipients may set standards for situations in
which the financial interest is not substantial or the gift is an
unsolicited item of nominal value. The standards of conduct must
provide for disciplinary actions to be applied for violations of such
standards by officers, employees, or agents of the recipient.
Sec. 435.43 Competition.
All procurement transactions must be conducted in a manner to
provide, to the maximum extent practical, open and free competition.
The recipient must be alert to organizational conflicts of interest as
well as noncompetitive practices among contractors that may restrict or
eliminate competition or otherwise restrain trade. In order to ensure
objective contractor performance and eliminate unfair competitive
advantage, contractors that develop or draft specifications,
requirements, statements of work, invitations for bids and/or requests
for proposals must be excluded from competing for such procurements.
Awards must be made to the bidder or offeror whose bid or offer is
responsive to the solicitation and is most advantageous to the
recipient, price, quality and other factors considered. Solicitations
must clearly set forth all requirements that the bidder or offeror must
fulfill in order for the bid or offer to be evaluated by the recipient.
Any and all bids or offers may be rejected when it is in the
recipient's interest to do so.
Sec. 435.44 Procurement procedures.
(a) All recipients must establish written procurement procedures.
These procedures must provide for, at a minimum, that paragraphs (a)
(1), (2), and (3) of this section apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and purchase
alternatives to determine which would be the most economical and
practical procurement for the Federal Government.
(3) Solicitations for goods and services provide for all of the
following:
(i) A clear and accurate description of the technical requirements
for the material, product or service to be procured. In competitive
procurements, such a description may not contain
[[Page 24781]]
features which unduly restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical
requirements in terms of functions to be performed or performance
required, including the range of acceptable characteristics or minimum
acceptable standards.
(iv) The specific features of ``brand name or equal'' descriptions
that bidders are required to meet when such items are included in the
solicitation.
(v) The acceptance, to the extent practicable and economically
feasible, of products and services dimensioned in the metric system of
measurement.
(vi) Preference, to the extent practicable and economically
feasible, for products and services that conserve natural resources and
protect the environment and are energy efficient.
(b) Positive efforts must be made by recipients to utilize small
businesses, minority-owned firms, and women's business enterprises,
whenever possible. Recipients of Federal awards must take all of the
following steps to further this goal:
(1) Ensure that small businesses, minority-owned firms, and women's
business enterprises are used to the fullest extent practicable.
(2) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and
women's business enterprises.
(3) Consider in the contract process whether firms competing for
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses,
minority-owned firms and women's business enterprises when a contract
is too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such
organizations as the Small Business Administration and the Department
of Commerce's Minority Business Development Agency in the solicitation
and utilization of small businesses, minority-owned firms and women's
business enterprises.
(c) The type of procuring instruments used (e.g., fixed price
contracts, cost reimbursable contracts, purchase orders, and incentive
contracts) may be determined by the recipient but must be appropriate
for the particular procurement and for promoting the best interest of
the program or project involved. The ``cost-plus-a-percentage-of-cost''
or ``percentage of construction cost'' methods of contracting may not
be used.
(d) Contracts may be made only with responsible contractors who
possess the potential ability to perform successfully under the terms
and conditions of the proposed procurement. Consideration must be given
to such matters as contractor integrity, record of past performance,
financial and technical resources or accessibility to other necessary
resources. In certain circumstances, contracts with certain parties are
restricted by agencies' implementation of Executive Orders 12549 and
12689, ``Debarment and Suspension'' (3 CFR, 1986 Comp., p. 189 and 3
CFR, 1989 Comp., p. 235).
(e) Recipients must, on request, make available for SSA, pre-award
review and procurement documents, such as request for proposals or
invitations for bids, independent cost estimates, etc., when any of the
following conditions apply:
(1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in this Part.
(2) The procurement is expected to exceed the simplified
acquisition threshold fixed at 41 U.S.C. 403 (11) (currently $100,000)
and is to be awarded without competition or only one bid or offer is
received in response to a solicitation.
(3) The procurement, which is expected to exceed the simplified
acquisition threshold, specifies a ``brand name'' product.
(4) The proposed award over the simplified acquisition threshold is
to be awarded to other than the apparent low bidder under a sealed bid
procurement.
(5) A proposed contract modification changes the scope of a
contract or increases the contract amount by more than the amount of
the simplified acquisition threshold.
Sec. 435.45 Cost and price analysis.
Some form of cost or price analysis must be made and documented in
the procurement files in connection with every procurement action.
Price analysis may be accomplished in various ways, including the
comparison of price quotations submitted, market prices and similar
indicia, together with discounts. Cost analysis is the review and
evaluation of each element of cost to determine reasonableness,
allocability and allowability.
Sec. 435.46 Procurement records.
Procurement records and files for purchases in excess of the
simplified acquisition threshold must include the following at a
minimum:
(a) Basis for contractor selection,
(b) Justification for lack of competition when competitive bids or
offers are not obtained, and
(c) Basis for award cost or price.
Sec. 435.47 Contract administration.
A system for contract administration must be maintained to ensure
contractor conformance with the terms, conditions and specifications of
the contract and to ensure adequate and timely follow up of all
purchases. Recipients must evaluate contractor performance and
document, as appropriate, whether contractors have met the terms,
conditions and specifications of the contract.
Sec. 435.48 Contract provisions.
The recipient must include, in addition to provisions to define a
sound and complete agreement, the following provisions in all
contracts. The following provisions must also be applied to
subcontracts:
(a) Contracts in excess of the simplified acquisition threshold
must contain contractual provisions or conditions that allow for
administrative, contractual, or legal remedies in instances in which a
contractor violates or breaches the contract terms, and provide for
such remedial actions as may be appropriate.
(b) All contracts in excess of the simplified acquisition threshold
must contain suitable provisions for termination by the recipient,
including the manner by which termination will be effected and the
basis for settlement. In addition, such contracts must describe
conditions under which the contract may be terminated for default as
well as conditions where the contract may be terminated because of
circumstances beyond the control of the contractor.
(c) Except as otherwise required by statute, an award that requires
the contracting (or subcontracting) for construction or facility
improvements must provide for the recipient to follow its own
requirements relating to bid guarantees, performance bonds, and payment
bonds unless the construction contract or subcontract exceeds $100,000.
For those contracts or subcontracts exceeding $100,000, SSA may accept
the bonding policy and requirements of the recipient, provided SSA has
made a determination that the Federal Government's interest is
adequately protected. If such a determination has not been made, the
minimum requirements are as follows:
(1) A bid guarantee from each bidder equivalent to five percent of
the bid
[[Page 24782]]
price. The ``bid guarantee'' must consist of a firm commitment such as
a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder will, upon acceptance
of his bid, execute such contractual documents as may be required
within the time specified.
(2) A performance bond on the part of the contractor for 100
percent of the contract price. A ``performance bond'' is one executed
in connection with a contract to secure fulfillment of all the
contractor's obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by statute of all persons
supplying labor and material in the execution of the work provided for
in the contract.
(4) Where bonds are required in the situations described herein,
the bonds must be obtained from companies holding certificates of
authority as acceptable sureties pursuant to 31 CFR part 223, ``Surety
Companies Doing Business with the United States.''
(d) All negotiated contracts (except those for less than the
simplified acquisition threshold) awarded by recipients must include a
provision to the effect that the recipient, SSA, the Comptroller
General of the United States, or any of their duly authorized
representatives, will have access to any books, documents, papers and
records of the contractor which are directly pertinent to a specific
program for the purpose of making audits, examinations, excerpts and
transcriptions.
(e) All contracts, including small purchases, awarded by recipients
and their contractors must contain the procurement provisions of
Appendix A to this Part, as applicable.
Reports and Records
Sec. 435.50 Purpose of reports and records.
Sections 435.51 through 435.53 set forth the procedures for
monitoring and reporting on the recipient's financial and program
performance and the necessary standard reporting forms. They also set
forth record retention requirements.
Sec. 435.51 Monitoring and reporting program performance.
(a) Recipients are responsible for managing and monitoring each
project, program, subaward, function or activity supported by the
award. Recipients must monitor subawards to ensure subrecipients have
met the audit requirements as delineated in Sec. 435.26.
(b) SSA will prescribe the frequency with which the performance
reports must be submitted. Except as provided in paragraph (f) of this
section, performance reports will not be required more frequently than
quarterly or, less frequently than annually. Annual reports are due 90
calendar days after the grant year; quarterly or semi-annual reports
are due 30 days after the reporting period. SSA may require annual
reports before the anniversary dates of multiple year awards in lieu of
these requirements. The final performance reports are due 90 calendar
days after the expiration or termination of the award.
(c) If inappropriate, a final technical or performance report will
not be required after completion of the project.
(d) When required, performance reports must generally contain, for
each award, brief information on each of the following:
(1) A comparison of actual accomplishments with the goals and
objectives established for the period, the findings of the
investigator, or both. Whenever appropriate and the output of programs
or projects can be readily quantified, such quantitative data should be
related to cost data for computation of unit costs.
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
(e) Recipients will not be required to submit more than the
original and two copies of performance reports.
(f) Recipients must immediately notify SSA of developments that
have a significant impact on the award-supported activities. Also,
notification must be given in the case of problems, delays, or adverse
conditions which materially impair the ability to meet the objectives
of the award. This notification must include a statement of the action
taken or contemplated, and any assistance needed to resolve the
situation.
(g) SSA may make site visits, as needed.
(h) SSA will comply with clearance requirements of 5 CFR part 1320
when requesting performance data from recipients.
Sec. 435.52 Financial reporting.
(a) Authorized forms. The following forms or such other forms as
may be approved by OMB are authorized for obtaining financial
information from recipients:
(1) SF-269 or SF-269A, Financial Status Report. (i) SSA requires
recipients to use the SF-269 or SF-269A to report the status of funds
for all nonconstruction projects or programs. However, SSA has the
option of not requiring the SF-269 or SF-269A when the SF-270, Request
for Advance or Reimbursement, or SF-272, Report of Federal Cash
Transactions, is determined to provide adequate information to meet its
needs, except that a final SF-269 or SF-269A will be required at the
completion of the project when the SF-270 is used only for advances.
(ii) SSA may prescribe whether the report will be on a cash or
accrual basis. If SSA requires accrual information and the recipient's
accounting records are not normally kept on the accrual basis, the
recipient will not be required to convert its accounting system, but
must develop such accrual information through best estimates based on
an analysis of the documentation on hand.
(iii) SSA will determine the frequency of the Financial Status
Report for each project or program, considering the size and complexity
of the particular project or program. However, the report will not be
required more frequently than quarterly or less frequently than
annually. A final report is required at the completion of the
agreement.
(iv) SSA will require recipients to submit the SF-269 or SF-269A
(an original and no more than two copies) no later than 30 days after
the end of each specified reporting period for quarterly and semi-
annual reports, and 90 calendar days for annual and final reports.
Extensions of reporting due dates may be approved by SSA upon request
of the recipient.
(2) SF-272, Report of Federal Cash Transactions. (i) When funds are
advanced to recipients, SSA will require each recipient to submit the
SF-272 and, when necessary, its continuation sheet, SF-272a. SSA will
use this report to monitor cash advanced to recipients and to obtain
disbursement information for each agreement with the recipients.
(ii) SSA may require forecasts of Federal cash requirements in the
``Remarks'' section of the report.
(iii) When practical and deemed necessary, SSA may require
recipients to report in the ``Remarks'' section the amount of cash
advances received in excess of three days. Recipients must provide
short narrative explanations of actions taken to reduce the excess
balances.
(iv) Recipients are required to submit not more than the original
and two copies of the SF-272 15 calendar days following the end of each
quarter. SSA may require a monthly report from those
[[Page 24783]]
recipients receiving advances totaling $1 million or more per year.
(v) SSA may waive the requirement for submission of the SF-272 for
any one of the following reasons:
(A) When monthly advances do not exceed $25,000 per recipient,
provided that such advances are monitored through other forms contained
in this section;
(B) If, in SSA's opinion, the recipient's accounting controls are
adequate to minimize excessive Federal advances; or
(C) When the electronic payment mechanisms provide adequate data.
(b) When SSA needs additional information or more frequent reports,
the following will be observed:
(1) When additional information is needed to comply with
legislative requirements, SSA will issue instructions to require
recipients to submit such information under the ``Remarks'' section of
the reports.
(2) When SSA determines that a recipient's accounting system does
not meet the standards in Sec. 435.21, additional pertinent information
to further monitor awards may be obtained upon written notice to the
recipient until such time as the system is brought up to standard. SSA,
in obtaining this information, will comply with report clearance
requirements of 5 CFR part 1320.
(3) SSA may shade out any line item on any report if not necessary.
(4) SSA may accept the identical information from the recipients in
machine readable format or computer printouts or electronic outputs in
lieu of prescribed formats.
(5) SSA may provide computer or electronic outputs to recipients
when such expedites or contributes to the accuracy of reporting.
Sec. 435.53 Retention and access requirements for records.
(a) Purpose. This section sets forth the requirements for record
retention and access to records for awards to recipients. SSA may not
impose any other record retention or access requirements upon
recipients.
(b) Retention periods. Financial records, supporting documents,
statistical records, and all other records pertinent to an award must
be retained for a period of three years from the date of submission of
the final expenditure report or, for awards that are renewed quarterly
or annually, from the date of the submission of the quarterly or annual
financial report, as authorized by SSA. The only exceptions are the
following:
(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) When records are transferred to or maintained by SSA, the 3-
year retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, etc. as
specified in paragraph (g) of this section.
(c) Use of copies. Copies of original records may be substituted
for the original records if authorized by SSA.
(d) Records with long term retention value. SSA will request
transfer of certain records to its custody from recipients when it
determines that the records possess long term retention value. However,
in order to avoid duplicate recordkeeping, SSA may make arrangements
for recipients to retain any records that are continuously needed for
joint use.
(e) Federal access to records. SSA, 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 will last as long as records are
retained.
(f) Public access to records. Unless required by statute, SSA may
not place restrictions on recipients that limit public access to the
records of recipients that are pertinent to an award, except when SSA
can demonstrate that such records will be kept confidential and would
have been exempted from disclosure pursuant to the Freedom of
Information Act (5 U.S.C. 552) if the records had belonged to SSA.
(g) Retention of indirect cost rate proposals, cost allocations
plans, etc. Paragraphs (g)(1) and (g)(2) of this section apply to the
following types of documents, and their supporting records: indirect
cost rate computations or proposals, cost allocation plans, and any
similar accounting computations of the rate at which a particular group
of costs is chargeable (such as computer usage chargeback rates or
composite fringe benefit rates).
(1) If submitted for negotiation. If the recipient submits to SSA
or the subrecipient submits to the recipient the proposal, plan, or
other computation to form the basis for negotiation of the rate, then
the 3-year retention period for its supporting records starts on the
date of such submission.
(2) If not submitted for negotiation. If the recipient is not
required to submit to SSA or the subrecipient is not required to submit
to the recipient the proposal, plan, or other computation for
negotiation purposes, then the 3-year retention period for the
proposal, plan, or other computation and its supporting records starts
at the end of the fiscal year (or other accounting period) covered by
the proposal, plan, or other computation.
Termination and Enforcement
Sec. 435.60 Purpose of termination and enforcement.
Sections 435.61 and 435.62 set forth uniform suspension,
termination and enforcement procedures.
Sec. 435.61 Termination.
(a) Awards may be terminated in whole or in part only under the
following circumstances--
(1) By SSA, if a recipient materially fails to comply with the
terms and conditions of an award.
(2) By SSA with the consent of the recipient, in which case the two
parties will agree upon the termination conditions, including the
effective date and, in the case of partial termination, the portion to
be terminated.
(3) By the recipient upon sending to SSA written notification
setting forth the reasons for such termination, the effective date,
and, in the case of partial termination, the portion to be terminated.
However, if SSA determines in the case of partial termination that the
reduced or modified portion of the grant will not accomplish the
purposes for which the grant was made, it may terminate the grant in
its entirety under either paragraph (a)(1) or (a)(2) of this section.
(b) If costs are allowed under an award, the responsibilities of
the recipient referred to in Sec. 435.71(a), including those for
property management as applicable, will be considered in the
termination of the award, and provision will be made for continuing
responsibilities of the recipient after termination, as appropriate.
[[Page 24784]]
Sec. 435.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to
comply with the terms and conditions of an award, whether stated in a
Federal statute, regulation, assurance, application, or notice of
award, SSA may, in addition to imposing any of the special conditions
outlined in Sec. 435.14, take one or more of the following actions, as
appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the
deficiency by the recipient or more severe enforcement action by SSA.
(2) Disallow (that is, deny both use of funds and any applicable
matching credit for) all or part of the cost of the activity or action
not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, SSA must
provide the recipient an opportunity for hearing, appeal, or other
administrative proceeding to which the recipient is entitled under any
statute or regulation applicable to the action involved.
(c) Effects of suspension and termination. Costs of a recipient
resulting from obligations incurred by the recipient during a
suspension or after termination of an award are not allowable unless
SSA expressly authorizes them in the notice of suspension or
termination or subsequently. Other recipient costs during suspension or
after termination which are necessary and not reasonably avoidable are
allowable if--
(1) The costs result from obligations which were properly incurred
by the recipient before the effective date of suspension or
termination, are not in anticipation of it, and in the case of a
termination, are noncancellable.
(2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
(d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude a recipient from being subject to
debarment and suspension under Executive Orders 12549 and 12689.
Subpart D--After-the-Award Requirements
Sec. 435.70 Purpose.
Sections 435.71 through 435.73 contain closeout procedures and
other procedures for subsequent disallowances and adjustments.
Sec. 435.71 Closeout procedures.
(a) Recipients must submit, within 90 calendar days after the date
of completion of the award, all financial, performance, and other
reports as required by the terms and conditions of the award. SSA may
approve extensions when requested by the recipient.
(b) Unless SSA authorizes an extension, a recipient must liquidate
all obligations incurred under the award not later than 90 calendar
days after the funding period or the date of completion as specified in
the terms and conditions of the award or in agency implementing
instructions.
(c) SSA will make prompt payments to a recipient for allowable
reimbursable costs under the award being closed out.
(d) The recipient must promptly refund any balances of unobligated
cash that SSA has advanced or paid and that is not authorized to be
retained by the recipient for use in other projects. OMB Circular A-129
governs unreturned amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, SSA
will make a settlement for any upward or downward adjustments to the
Federal share of costs after closeout reports are received.
(f) The recipient must account for any real and personal property
acquired with Federal funds or received from the Federal Government in
accordance with Secs. 435.31 through 435.37.
(g) In the event a final audit has not been performed prior to the
closeout of an award, SSA will retain the right to recover an
appropriate amount after fully considering the recommendations on
disallowed costs resulting from the final audit.
Sec. 435.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following:
(1) The right of SSA to disallow costs and recover funds on the
basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a
result of later refunds, corrections, or other transactions.
(3) Audit requirements in Sec. 435.26.
(4) Property management requirements in Secs. 435.31 through
435.37.
(5) Records retention as required in Sec. 435.53.
(b) After closeout of an award, a relationship created under an
award may be modified or ended in whole or in part with the consent of
SSA and the recipient, provided the responsibilities of the recipient
referred to in Sec. 435.73(a), including those for property management
as applicable, are considered and provisions made for continuing
responsibilities of the recipient, as appropriate.
Sec. 435.73 Collection of amounts due.
(a) Methods of collection. Any funds paid to a recipient in excess
of the amount to which the recipient is finally determined to be
entitled under the terms and conditions of the award constitute a debt
to the Federal Government. If not paid within a reasonable period after
the demand for payment, SSA may reduce the debt by:
(1) making an administrative offset against other requests for
reimbursements;
(2) withholding advance payments otherwise due to the recipient; or
(3) taking other action permitted by statute.
(b) Charging of interest. Except as otherwise provided by law, SSA
will charge interest on an overdue debt in accordance with 4 CFR
Chapter II, ``Federal Claims Collection Standards.''
Subpart E--Disputes
Sec. 435.80 Appeal process.
(a) Levels of appeal. Grantee institutions (grantees) may appeal
certain post-award adverse grant administration decisions made by SSA
officials in the administration of discretionary grant programs. SSA
has two levels of appeal:
(1) initial appeal to the Associate Commissioner for the Office of
Acquisition and Grants (ACOAG) from an adverse decision rendered by the
Grants Management Officer (GMO); and
(2) final appeal to the Commissioner of Social Security from an
adverse decision rendered by the ACOAG.
(b) Decisions that may be appealed. The following types of adverse
post-award written decisions by the GMO may be appealed:
(1) A disallowance or other determination denying payment of an
amount claimed under an award. This does not apply to determinations of
award amount or disposition of unobligated balances, or selection in
the award document of an option for disposition of program-related
income.
(2) A termination of an award for failure of the grantee to comply
with any law, regulation, assurance, term, or condition applicable to
the award.
(3) A denial of a noncompeting continuation award under the project
period system of funding where the denial is for failure to comply with
the
[[Page 24785]]
terms and conditions of a previous award.
(4) A voiding of an award on the basis that it was fraudulently
obtained or because the award was not authorized by statute or
regulation.
(c) Notice of adverse decision and requirements of grantee
response. The Grants Management Officer's (GMO) adverse post-award
written decision should include the following statement:
This is the final decision of the Grants Management Officer. It
will become the final decision of the Social Security Administration
unless you submit a request for review of this decision to the
Associate Commissioner for the Office of Acquisition and Grants,
1710 Gwynn Oak Avenue, Baltimore, Maryland 21207-5279. Your request
for review must be in writing, include a copy of this decision, and
fully state why you disagree with it. The request for review must be
received by the ACOAG no later than 30 calendar days after the date
of this decision.
Sec. 435.81 Initial appeal.
(a) Timeliness of appeal to ACOAG. A grantee may appeal an adverse
decision rendered by the GMO by submitting to the ACOAG a written
request for review of the adverse decision. The written request for
review must be received by the ACOAG no later than 30 calendar days
after the date of the GMO's adverse decision. Any request for review
that is received after the thirtieth day will be dismissed as untimely.
(b) Content of appeal to ACOAG. The written request for review
should fully explain why the grantee disagrees with the GMO's decision,
state the pertinent facts and law relied upon, and provide any relevant
documentation in support of the grantee's position.
(c) Decision of ACOAG. The ACOAG, or the ACOAG's delegate, will
issue a written decision within 30 calendar days of the date of receipt
of the written request for review. If the written decision is adverse
to the grantee, the decision will include the following statement:
This is the final decision of the Office of Acquisition and
Grants. It will become the final decision of the Social Security
Administration unless you submit a request for review of this
decision to the Commissioner of Social Security, Social Security
Administration, Baltimore, Maryland 21235-0001. Your request for
review must be in writing, include a copy of this decision, and
fully state why you disagree with it. The request for review must be
received by the Commissioner no later than 15 calendar days after
the date of this decision. You should also send a copy of the
request for review to the ACOAG.
Sec. 435.82 Appeal of decision of ACOAG.
(a) Timeliness of appeal to Commissioner. A grantee may appeal an
adverse decision rendered by the ACOAG by submitting to the
Commissioner of Social Security a written request for review of the
ACOAG's decision. The written request for review must be received by
the Commissioner no later than 15 calendar days after the date of the
ACOAG's adverse decision. Any request for review that is filed after
the fifteenth day will be dismissed as untimely. The grantee should
also send a copy of the request for review to the ACOAG.
(b) Content of appeal to Commissioner. The written request for
review should fully explain why the grantee disagrees with the ACOAG's
decision, state the pertinent facts and law relied upon, and provide
any relevant documentation in support of the grantee's position. A copy
of the ACOAG's decision should also be appended to the request for
review.
(c) Decision of Commissioner. The Commissioner, or the
Commissioner's delegate, will issue a written decision on the request
for review. Generally, the decision will be issued within 90 calendar
days of the date of receipt of the request for review. If a decision is
not issued within 90 days, the Commissioner, or the Commissioner's
delegate, will inform the grantee in writing when a decision can be
expected.
(d) Final decision of SSA. The decision of the Commissioner, or of
the Commissioner's delegate, shall be the final decision of the Social
Security Administration on the matter(s) in dispute.
Appendix A to Part 435--Contract Provisions
All contracts, awarded by a recipient including small purchases,
must contain the following provisions as applicable:
1. Equal Employment Opportunity--All contracts must contain a
provision requiring compliance with Executive Order 11246, ``Equal
Employment Opportunity,'' as amended by Executive Order 11375,
``Amending Executive Order 11246 Relating to Equal Employment
Opportunity,'' and as supplemented by regulations at 41 CFR part 60,
``Office of Federal Contract Compliance Programs, Equal Employment
Opportunity, Department of Labor.''
2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.
276c)--All contracts and subgrants in excess of $2000 for
construction or repair awarded by recipients and subrecipients must
include a provision for compliance with the Copeland ``Anti-
Kickback'' Act (18 U.S.C. 874), as supplemented by Department of
Labor regulations (29 CFR part 3, ``Contractors and Subcontractors
on Public Building or Public Work Financed in Whole or in Part by
Loans or Grants from the United States''). The Act provides that
each contractor or subrecipient will be prohibited from inducing, by
any means, any person employed in the construction, completion, or
repair of public work, to give up any part of the compensation to
which he is otherwise entitled. The recipient must report all
suspected or reported violations to the Federal awarding agency.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When
required by Federal program legislation, all construction contracts
awarded by the recipients and subrecipients of more than $2000 must
include a provision for compliance with the Davis-Bacon Act (40
U.S.C. 276a to a-7) and as supplemented by Department of Labor
regulations (29 CFR part 5, ``Labor Standards Provisions Applicable
to Contracts Governing Federally Financed and Assisted
Construction''). Under this Act, contractors are required to pay
wages to laborers and mechanics at a rate not less than the minimum
wages specified in a wage determination made by the Secretary of
Labor. In addition, contractors are required to pay wages not less
than once a week. The recipient must place a copy of the current
prevailing wage determination issued by the Department of Labor in
each solicitation and the award of a contract will be conditioned
upon the acceptance of the wage determination. The recipient must
report all suspected or reported violations to the Federal awarding
agency.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in
excess of $100,000 for construction contracts and for other
contracts that involve the employment of mechanics or laborers must
include a provision for compliance with Sections 102 and 107 of the
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), as
supplemented by Department of Labor regulations (29 CFR part 5).
Under Section 102 of the Act, each contractor is required to compute
the wages of every mechanic and laborer on the basis of a standard
work week of 40 hours. Work in excess of the standard work week is
permissible provided that the worker is compensated at a rate of not
less than 1\1/2\ times the basic rate of pay for all hours worked in
excess of 40 hours in the work week. Section 107 of the Act is
applicable to construction work and provides that no laborer or
mechanic will be required to work in surroundings or under working
conditions which are unsanitary, hazardous or dangerous. These
requirements do not apply to the purchases of supplies or materials
or articles ordinarily available on the open market, or contracts
for transportation or transmission of intelligence.
5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or agreements for the performance of experimental,
developmental, or research work must provide for the rights of the
Federal Government and the recipient in any resulting invention in
accordance with 37 CFR part 401, ``Rights to Inventions Made by
Nonprofit Organizations and Small Business
[[Page 24786]]
Firms Under Government Grants, Contracts and Cooperative
Agreements,'' and any implementing regulations issued by the
awarding agency.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--
Contracts and subgrants of amounts in excess of $100,000 must
contain a provision that requires the recipient to agree to comply
with all applicable standards, orders or regulations issued pursuant
to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act as amended (33 U.S.C. 1251 et seq.).
Violations must be reported to the Federal awarding agency and the
Regional Office of the Environmental Protection Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors
who apply or bid for an award of more than $100,000 must file the
required certification. Each tier certifies to the tier above that
it will not and has not used Federal appropriated funds to pay any
person or organization for influencing or attempting to influence an
officer or employee of any agency, a member of Congress, officer or
employee of Congress, or an employee of a member of Congress in
connection with obtaining any Federal contract, grant or any other
award covered by 31 U.S.C. 1352. Each tier must also disclose any
lobbying with non-Federal funds that takes place in connection with
obtaining any Federal award. Such disclosures are forwarded from
tier to tier up to the recipient.
8. Debarment and Suspension (Executive Orders 12549 and 12689)--
No contract will be made to parties listed on the General Services
Administration's List of Parties Excluded from Federal Procurement
or Nonprocurement Programs in accordance with Executive Orders 12549
and 12689, ``Debarment and Suspension.'' This list contains the
names of parties debarred, suspended, or otherwise excluded by
agencies, and contractors declared ineligible under statutory or
regulatory authority other than Executive Order 12549. Contractors
with awards that exceed the simplified acquisition threshold must
provide the required certification regarding its exclusion status
and that of its principal employees.
[FR Doc. 00-9399 Filed 4-26-00; 8:45 am]
BILLING CODE 4191-02-U