Department of Commerce Grants and Cooperative Agreements Manual

Department of Commerce

Grants and Cooperative

Agreements Manual

Grants and Cooperative Agreements Manual

OAM/GMD

20 April 2021

Contents

1. PREFACE .................................................................................................................................................. 1

2. INTRODUCTION ...................................................................................................................................... 4

A. Purpose ............................................................................................................................................ 4

B. Authority .......................................................................................................................................... 4

C. Coverage .......................................................................................................................................... 4

D. Effect on Other Issuances ................................................................................................................ 4

E. Government-Wide Requirements Used in the Administration of DOC Awards .............................. 4

3. GLOSSARY OF ACRONYMS AND DEFINITIONS ........................................................................................ 8

A. Acronyms ......................................................................................................................................... 8

B. Definitions ........................................................................................................................................ 9

4. RESPONSIBILITIES IN GRANTS ADMINISTRATION ................................................................................. 14

A. Chief Financial Officer and Assistant Secretary for Administration ............................................... 14

B. Office of Acquisition Management (OAM) .................................................................................... 14

C. Office of General Counsel .............................................................................................................. 16

D. Office of Inspector General ............................................................................................................ 19

E. Finance and Budget Office ............................................................................................................. 20

F. Grants Office .................................................................................................................................. 21

G. Liaison Responsibilities .................................................................................................................. 24

H. Program Office ............................................................................................................................... 25

I. Property Management Office ........................................................................................................ 28

5. RELATIONSHIPS WITH OUTSIDE ENTITIES ............................................................................................ 29

A. Overview ........................................................................................................................................ 29

B. Grants ............................................................................................................................................. 29

C. Cooperative Agreements ............................................................................................................... 29

D. Procurement Contracts .................................................................................................................. 31

E. Other Types of Agreements ........................................................................................................... 31

6. TYPES OF FINANCIAL ASSISTANCE FUNDS AND AWARDS .................................................................... 33

A. Discretionary Funds ....................................................................................................................... 33

This manual is for internal Department of Commerce use only. It is to be used by operating units,

grants offices and all involved in the grants and cooperative agreements lifecycle. This manual is

maintained by the Financial Assistance Policy and Oversight Division within the Office of Acquisition

Management.

20 April 2021

B. Nondiscretionary Funds ................................................................................................................. 34

7. TYPES OF APPLICATIONS ...................................................................................................................... 35

A. Pre-applications ............................................................................................................................. 35

B. Competitive Applications ............................................................................................................... 35

C. Noncompetitive Applications ........................................................................................................ 36

D. Supplemental Applications ............................................................................................................ 37

8. MERIT REVIEW, SELECTION, APPROVAL, AND NOTIFICATION PROCEDURES ...................................... 38

A. Overview ........................................................................................................................................ 38

B. Review Standards ........................................................................................................................... 38

C. Evaluation and Selection Requirements for Competition ............................................................. 40

D. Review Process for Applications for Competitive Awards ............................................................. 42

E. Review Process for Applications for Institutional Awards ............................................................. 43

F. Review Process for Applications for Noncompetitive Awards Made with Discretionary Funds ... 43

G. Review Process for Applications for Awards Mandated or Limited by Statute ............................. 45

H. Congressional Notification ............................................................................................................. 45

I. Obligation of Funds ........................................................................................................................ 45

J. Notice to Applicants ....................................................................................................................... 46

9. PRE-AWARD ADMINISTRATIVE REQUIREMENTS .................................................................................. 47

A. Application Package ....................................................................................................................... 47

B. Recommendation for Funding ....................................................................................................... 48

C. Budget Analysis .............................................................................................................................. 49

D. Costs ............................................................................................................................................... 49

E. Executive Order (E.O.) 12372 (Intergovernmental Review of Federal Programs) ......................... 51

F. Applicant’s Management and Financial Capabilities ..................................................................... 51

G. Review of Recipient’s Risk.............................................................................................................. 52

H. Awards to Insular Areas ................................................................................................................. 53

I. Preparation of Financial Assistance Award .................................................................................... 53

10. POST AWARD ADMINISTRATION REQUIREMENTS ............................................................................... 56

A. Official Award File .......................................................................................................................... 56

B. Costs under DOC Awards ............................................................................................................... 58

C. Amendments .................................................................................................................................. 58

D. Project Monitoring ......................................................................................................................... 59

E. Recipient Responsibilities .............................................................................................................. 59

iii

20 April 2021

11. ENFORCEMENT ..................................................................................................................................... 60

A. Overview ........................................................................................................................................ 60

B. Enforcement .................................................................................................................................. 60

C. Concurrent Actions ........................................................................................................................ 62

12. AWARD CLOSE-OUT ........................................................................................................................... 63

A. Responsibilities ............................................................................................................................ 63

B. Unobligated Funds ....................................................................................................................... 63

C. Deobligation of Funds .................................................................................................................. 64

D. Retention of Records .................................................................................................................... 64

E. Unilateral Termination and/or Administrative Closeout ............................................................... 64

Appendix A: Sample Business Official’s Notice to Submit Documentation ......................................... 67

Appendix B: Sample Missing Data Report and Due Diligence Checklist .............................................. 69

Appendix C: Sample Unilateral Termination and/or Unilateral Closeout Memorandum ................... 71

13. AUDITS .................................................................................................................................................. 72

A. Audit Requirements ....................................................................................................................... 72

B. Other Audits ................................................................................................................................... 73

C. Access to Recipient Records .......................................................................................................... 73

D. Audit Resolution ............................................................................................................................ 73

E. Audit Implementation .................................................................................................................... 74

14. ESTABLISHMENT AND COLLECTION OF FINANCIAL ASSISTANCE-RELATED DEBTS .............................. 75

A. Standards for the Establishment and Collection of Debts ............................................................. 75

B. Establishment of a Debt ................................................................................................................. 75

C. Debt Collection .............................................................................................................................. 76

D. Impact of Delinquent Federal Debts on Award Eligibility .............................................................. 77

E. Exceptions ...................................................................................................................................... 79

Exhibit A – Sample Notice and Demand Letter/Audit Resolution Determination ............................... 80

15. GRANTS ADMINISTRATION POLICIES AND REQUIREMENTS ................................................................ 85

A. Anti-Deficiency Act ......................................................................................................................... 85

B. Bona Fide Needs Rule .................................................................................................................... 85

C. Conflicts of Interest ........................................................................................................................ 85

D. Consulting Services ........................................................................................................................ 86

E. Coordination with DOC and Other Federal Agencies .................................................................... 86

F. DOC Forms ..................................................................................................................................... 87

G. Freedom of Information Act (FOIA) ............................................................................................... 87

20 April 2021

H. Management and Institutional Grant Reviews .............................................................................. 87

I. Privacy Act ...................................................................................................................................... 88

J. Recipient Name Change ................................................................................................................. 88

K. Requests for Prior Approval ........................................................................................................... 88

L. Statutory Authority ........................................................................................................................ 88

M. Transfer of Award .......................................................................................................................... 88

N. Transfer of Funds ........................................................................................................................... 90

O. Waivers and Deviations ................................................................................................................. 90

16. CONSTRUCTION AWARDS .................................................................................................................... 91

A. Purpose .......................................................................................................................................... 91

B. Authority ........................................................................................................................................ 91

C. Scope of Chapter ............................................................................................................................ 91

D. Policy .............................................................................................................................................. 91

E. General Requirements ................................................................................................................... 92

F. Disbursement of Grant Funds and Financial Administration ....................................................... 103

G. Award Amendments .................................................................................................................... 104

H. Post-Construction Requirements ................................................................................................. 106

Appendix A: Applicable Regulations, OMB Circulars and Agency-specific Guidance ........................ 111

17. GUIDELINES FOR THE PREPARATION OF PUBLIC NOTICES ANNOUNCING THE AVAILABILITY OF

FINANCIAL ASSISTANCE: NOTICE OF FUNDING OPPORTUNITY (NOFO) AND FEDERAL REGISTER

NOTICES .............................................................................................................................................. 113

A. Background .................................................................................................................................. 113

B. Format of NOFO ........................................................................................................................... 114

C. Publication in the Federal Register .............................................................................................. 116

D. Federal Register Format Requirements ....................................................................................... 117

E. Coordination and Clearance ........................................................................................................ 121

18. MULTI-YEAR FUNDING PROCEDURES ................................................................................................. 122

A. General ......................................................................................................................................... 122

B. Multi-Year Awards ....................................................................................................................... 122

C. Multi-Year Funding Principles ...................................................................................................... 122

D. Preparation of New Award .......................................................................................................... 124

E. Preparation of Amendment(s) ..................................................................................................... 125

20 April 2021

Summary of Substantive Changes

1. The following definitions in Chapter 3 have been either added, deleted, updated and/or edited:

a. Assistance Listings;

b. Budget Period (previously referred to as the Funding Period);

c. New Grant/New Award;

d. Renewal Amendment and Renewal Award;

e. SAM; and

f. SAM Exclusions.

2. Updated Chapter 2, Section E.3.w – incorporated EO 13798 (May 4, 2017, Promoting Free

Speech and Religious Liberty), and OMB M-20-09.

3. Updated Chapter 4, Section C.3.c. regarding OGC review requirements for continuation

amendments under multi-year awards.

4. Chapter 10, Section C (Amendments) – added “extension to period of performance” to the list.

5. Chapter 15, Section F (DOC Forms), removed Forms CD-571 and CD-478 from circulation.

6. Removed format for the NOFO from Chapter 17 since this information is already in 2 C.F.R. Part

200.

7. Updated Chapter 18, section D.1.c. – use of and recommended language for specific award

conditions.

8. Chapters 11 and 16 – updated “termination for cause” in sections 11.B.6 and 16.G.4.b.(3).

9. Updated Chapters 12 and 17 – increased window for recipients to submit closeout documents

from 90 to 120 days and added 90 day submission requirement for subrecipients.

10. Increased the Simplified Acquisition Threshold to $250,000. Note, the micro-purchase threshold

was also increased to $10,000.

11. Given 2 C.F.R. Part 200 now uses the term “budget period,” its use has been adopted

throughout the Manual (funding period is no longer used)

12. Additionally, replaced “project period” with “period of performance” throughout the Manual.

20 April 2021

1. PREFACE

A. The U.S. Department of Commerce’s (DOC) broad range of responsibilities include, but are not

limited to, expanding U.S. exports, developing innovative technologies, gathering and disseminating

statistical data, measuring economic growth, granting patents, promoting minority entrepreneurship,

providing effective management and environmental stewardship of the nation’s coastal and marine

resources, and predicting and monitoring the weather. Although DOC’s missions are very diverse, they

are unified by one overarching mandate -- to work with the business community to foster economic

growth and the creation of new American jobs to ensure sustainable economic opportunities.

B. DOC may award Federal financial assistance (e.g., a grant or cooperative agreement) when

authorized by law. While Federal agencies generally have “inherent” authority to enter into contracts to

procure goods or services for their own use, there is no comparable inherent authority to enter into

financial assistance relationships. Therefore, the relevant legislation must be studied to determine

whether a financial assistance relationship is authorized at all, and if so, under what circumstances and

conditions. There is no general Department-wide financial assistance authority and the Federal Grant

and Cooperative Agreement Act of 1977 (31 U.S.C. §§ 6301-6308), in and of itself, does not provide such

authority.

Such authority must be provided by specific statute. The operating unit’s basic legislation

must be analyzed to determine whether an assistance relationship is authorized, and if so, under what

circumstances and conditions. The following operating units are authorized to provide financial

assistance:

1. Census Bureau. Census provides cooperative agreements to make awards to, or conclude

cooperative agreements with appropriate entities, including any federal, state, or local governmental

unit, or institution of higher education, to aid and promote statistical, research, and methodology

activities related to the Census Bureau mission under Title 13 of the United States Code. Awards

provided under this notice support the Census Bureau and DOC by: (1) developing and analyzing

information for program and policy considerations; and, (2) undertaking special research.

2. Economic Development Administration (EDA). EDA leads the federal economic development

agenda by promoting innovation and competitiveness, preparing American regions for growth and

success in the worldwide economy. EDA investment assistance is available to rural and urban areas of

the Nation experiencing or threatened with substantial economic distress, including high levels of

unemployment, low income levels, significant declines in per-capita income, sudden major lay-offs or

plant closures, or natural or other major disasters. EDA works in partnership with eligible applicants,

including State and local governments, district organizations, public or private non-profit organizations,

Indian tribes, and institutions of higher education.

3. International Trade Administration (ITA). ITA is responsible for most non-agricultural U.S. trade

issues and works with the Office of the U.S. Trade Representative in coordinating U.S. trade policy. ITA

The Federal Grant and Cooperative Agreement Act is designed to ensure that agencies use the legal

instrument that suits the intended and authorized relationship (e.g., a contract when an agency is purchasing

goods or services for the agency’s direct benefit or use; a grant to support a recipient in carrying out a public

purpose of support or stimulation authorized by a law).

20 April 2021

operates through four principal units: Market Access and Compliance, Trade Development, Import

Administration, and U.S. and Foreign Commercial Service. ITA provides grants and cooperative

agreements through several programs to promote trade, investment, and commercial relations, and

maintains comprehensive commercial and economic data on particular countries and regions of the

world. ITA grant and cooperative agreement programs are also intended to strengthen domestic export

competitiveness and promote U.S. industry's increased participation in international markets.

4. Minority Business Development Agency (MBDA). MBDA is the only Federal agency created

specifically to foster the establishment and growth of minority-owned businesses in the United States.

Through grants and cooperative agreements, MBDA provides financial assistance to public and private

organizations that provide a wide range of business development services to minority entrepreneurs

through a nationwide network.

5. National Institute of Standards and Technology (NIST). NIST provides grants and cooperative

agreements to aid U.S. industry through research and services, contributes to public health and safety,

supports U.S. scientific and engineering research communities, and works with state and local

organizations to either establish or expand existing services for small to medium-sized

manufacturers. These services address critical needs in areas such as production techniques, technology

applications, and business practices.

6. National Oceanic and Atmospheric Administration (NOAA). NOAA is a federal agency focused on

the condition of the oceans and the atmosphere. Through grants and cooperative agreements, NOAA

plays several distinct roles within DOC – supplier of environmental information products, provider of

environmental stewardship services and leader in applied scientific research.

7. National Telecommunications and Information Administration (NTIA). NTIA is the principal

executive branch advisor to the President on domestic and international communications and

information policies. It ensures effective and efficient Federal use of the electromagnetic spectrum,

develops (with other Federal agencies) policies for international communications and standards-setting

organizations, serves as the Federal telecommunications research and engineering center, and

administers grants and cooperative agreements to public and non-profit organizations for projects that

incorporate information and telecommunications technology.

a. First Responder Network Authority (FirstNet). As described in the Middle Class Tax Relief

and Job Creation Act of 2012, 47 U.S.C. §§ 1401-1473, FirstNet holds a single, nationwide Federal

Communications Commission (FCC) license to use Band 14 spectrum frequencies for the purposes of

developing, building and operating the Nationwide Public Safety Broadband Network (NPSBN) and

awards grants to assist eligible state, county and municipal public safety entities (incumbents) in

relocating their currently active communication operations from Band 14 to other frequency

assignments allocated by the FCC.

C. The DOC administers a diverse array of programs and projects concerned with the entire

spectrum of business and economic development concerns as outlined above. Departmental operating

units and Grants Offices are responsible for the award, administration, and monitoring of these

programs under a variety of legislative authorities, governing regulations, policies, and procedures using

mandatory and discretionary grants and cooperative agreements. Awards are made to a wide variety of

recipients, including state and local governments, for-profit or commercial organizations, non-profit

20 April 2021

organizations, and educational institutions. The administration of DOC grant and cooperative

agreement programs requires adherence not only to the program objectives for which funds are

awarded, but also to sound business practices, as well as laws, regulations, policies, and procedures

governing grants and cooperative agreements.

D. The DOC views its relationship with grant and cooperative agreement recipients as a

partnership, with the recipient providing the effort and expertise necessary to carry out approved

activities and the Department providing financial assistance and involvement as appropriate. In

implementing these respective roles, DOC has established Grants Management Offices and Program

Offices. Grants Management Offices serve as the focal point for the business management aspects of

grants administration, including maintenance of official files and receipt of most required reports from

award recipients. The Grants Officer is the DOC official authorized to award grants and cooperative

agreements and make decisions on requests for any changes to or revisions of any aspect of awards,

including but not limited to, terms and conditions, budgets, and program plans (i.e., scopes of work).

The Program Officers serve as the focal point for the programmatic, scientific/technical aspects of the

programs and projects. Questions concerning interpretation of grant and cooperative agreement policy

or the applicability of certain policies to specific programs should be directed to the designated DOC

Grants Officer.

E. Department-wide responsibility for developing and implementing financial assistance

administrative and operational policies rests with the Office of Acquisition Management (OAM) under

the Department’s Chief Financial Officer and Assistant Secretary for Administration (CFO/ASA).

F. This Grants Manual (Manual) is intended to provide a common understanding of the framework

for the administration of grants and cooperative agreements within which DOC staff and responsible

recipient officials must operate.

G. Questions concerning this manual should be directed to the cognizant Grants Officer or the

Director, Financial Assistance Policy and Oversight Division, Office of Acquisition Management, U.S.

Department of Commerce, Room 1854, Washington, D.C. 20230, telephone number: (202) 482-0602.

20 April 2021

2. INTRODUCTION

A. Purpose

This Manual sets forth DOC guidance on Federal award administration and provides DOC with a

uniform set of minimum procedures to govern the award lifecycle, from the requirements for

announcing the availability of Federal funding, including the Notice of Funding Opportunity (NOFO) and

request for applications (RFA), to reviewing, awarding, managing, and closing out awards. The Manual

references policies and procedures for use by DOC offices and operating units for ensuring the

consistent implementation of legislation, regulations, Office of Management and Budget (OMB)

circulars, executive orders (EOs), and Departmental policies and procedures related to financial

assistance. The Manual is for internal use by DOC personnel and does not create any rights or liabilities

with respect to the public or any third party. It is to be used by operating units, Grants Offices, and all

involved in the Federal award lifecycle. This Manual is maintained by the Financial Assistance Policy and

Oversight Division within the Office of Acquisition Management.

B. Authority

This Manual is issued pursuant to the authority of 5 U.S.C. § 301 (Departmental Regulations) and

Department Organization Order (DOO) 10-5 (Chief Financial Officer and Assistant Secretary for

Administration).

C. Coverage

This Manual applies to all DOC operating units in their award, management, and administration of

grants and cooperative agreements. This Manual shall have the same force and effect as a Department

Administrative Order (DAO). Amendments (substantive changes) or revisions (corrections or updates) to

the Manual may be developed and issued by the Director, Office of Acquisition Management (OAM).

Proposed amendments to this Manual will be distributed for review and comment.

D. Effect on Other Issuances

This Manual provides guidance for the administration of Federal awards, and supersedes all

previous financial assistance directives, including notices and orders. DOC operating units may issue

supplemental operating unit-specific policies and procedures to cover items not covered by this Manual

to address programmatic requirements that do not conflict with the provisions of this Manual or to

implement unique statutory requirements and regulations. If an operating unit has specific statutory or

regulatory requirements that necessitate policies, procedures, or restrictions not covered by the

Manual, the operating unit may develop supplemental policies and procedures addressing the specific

requirements. The supplements must be consistent with this Manual. The heads of operating units or

other appropriate officials of operating units must submit supplements, and any revisions thereto, and

an assurance that the supplement is consistent with the requirements in this Manual to the Office of

Inspector General (OIG), the Office of General Counsel (OGC), and OAM for timely review and comment

prior to internal issuance and use.

E. Government-Wide Requirements Used in the Administration of DOC Awards

As a condition of receiving Federal financial assistance awards, DOC enforces recipient compliance

through government-wide requirements. Operating units, recipients and subrecipients shall administer

all DOC financial assistance awards in accordance with applicable statutes, regulations, EOs, and OMB

20 April 2021

circulars that may be attached to the expenditure of Federal funds. A list of requirements includes, but

is not limited to the following:

1. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal

Awards codified at 2 CFR Part 200 (Uniform Guidance).

a. In accordance with the Federal Register notice published on December 19, 2014 (79 FR

75871) and the regulation at 2 CFR § 1327.101, effective December 26, 2014, the DOC adopted the

Uniform Guidance. The Uniform Guidance streamlines the language from eight OMB circulars,

including cost principles (OMB Circulars A-21, A-87, A-122), administrative requirements (OMB

Circulars A-102 and A-110), and audit requirements (OMB Circulars A-50 and A-133), into one

consolidated set of guidance applicable to Federal financial assistance awards. For funded awards

made on or after December 26, 2014, the Uniform Guidance supersedes DOC’s uniform

administrative requirements set out at 15 CFR Parts 14 and 24. Pursuant to 2 C.F.R. § 200.109

(Review date), the Uniform Guidance must be reviewed every five years. As a result, revisions to the

Uniform Guidance were published on August 13, 2020 and took effect November 12, 2020, except

for the amendments to § 200.216 (Prohibition on certain telecommunications and video surveillance

services or equipment), § 200.471 (Telecommunications and surveillance costs), and § 200.340

(Termination), which took effect August 13, 2020.

2. Contract Cost Principles and Procedures (48 CFR Part 31).

a. The Uniform Guidance supersedes cost principles set out in OMB Circulars and codified at 2

CFR Parts 220, 225, and 230, but does not supersede the Contract Cost Principles, which generally

apply to for-profit entities. At 2 CFR § 200.101(a)(2), the Uniform Guidance provides that agencies

may, but are not required to, apply Subparts A through E of 2 CFR Part 200, which include the cost

principles at Subpart E, to for-profit entities. Therefore, the Grants Officer, in consultation with the

Program Office may elect to apply the cost principles under the Uniform Guidance (see Subpart E to

2 CFR Part 200) or the Contract Cost Principles when making an award to a for-profit entity.

3. Other Requirements.

a. OMB Circular A-50 Revised (Audit Follow-Up), except as superseded by 2 CFR Part 200 (see 2

CFR § 200.104 (Supersession));

b. OMB Circular A-129 Revised (Policies for Federal Credit Programs and Non-Tax Receivables);

c. 2 CFR Part 1326 (Nonprocurement Debarment and Suspension);

d. 2 CFR Part 1329 (Governmentwide Requirements for Drug-Free Workplace (Financial

Assistance));

e. 5 CFR Part 1320 (Controlling Paperwork Burdens on the Public);

f. 15 CFR Part 8 (Nondiscrimination in Federally Assisted Programs of the Department of

Commerce – Effectuation of Title VI of the Civil Rights Act of 1964);

g. 15 CFR Part 8a (Nondiscrimination on the Basis of Sex in Education Programs or Activities

Receiving Federal Financial Assistance);

h. 15 CFR Part 8b (Prohibition of Discrimination Against the Handicapped in Federally Assisted

Programs Operated by the Department of Commerce);

i. 15 CFR Part 11 (Uniform Relocation Assistance and Real Property Acquisition for Federal and

Federally Assisted Programs);

20 April 2021

j. 2 CFR Part 200, Appendix 1, D.5 (Intergovernmental Review);

k. 15 CFR Part 20 (Nondiscrimination on the Basis of Age in Programs or Activities Receiving

Federal Financial Assistance);

l. 15 CFR Part 19 (Commerce Debt Collection);

m. 15 CFR Part 25 (Program Fraud Civil Remedies);

n. 15 CFR Part 27 (Protection of Human Subjects);

o. 15 CFR Part 28 (New Restrictions on Lobbying);

p. 15 CFR Part 273 (Metric Conversion Policy for Federal Agencies);

q. 31 CFR Part 223 (Surety Companies Doing Business with the United States);

r. 31 CFR Part 900-904 (Federal Claims Collection Standards);

s. 37 CFR Part 401 (Rights to Inventions Made by Nonprofit Organizations and Small Business

Firms under Government Grants, Contracts, and Cooperative Agreements);

t. EO 13653 (Nov 1, 2013, Preparing the United States for the Impacts of Climate Change);

u. EO 13693 (Mar 19, 2015, Planning for Federal Sustainability in the Next Decade);

v. EO’s 12549 and 12689 (Debarment and Suspension);

w. EO 13798 (May 4, 2017, Promoting Free Speech and Religious Liberty) and OMB M-20-09

;

and

x. Assurances contained in OMB Standard Forms: Form SF-424B (Assurances – Non-

Construction Programs) and Form SF-424D (Assurances – Construction Programs), which reference

laws and regulations that may apply to particular awards.

4. DOC Standard Terms and Conditions (ST&Cs). The ST&Cs list all applicable statutes,

regulations, EOs, OMB circulars, provisions of the Uniform Guidance, any other incorporated

terms and conditions, and approved applications. The ST&Cs generally apply to DOC financial

assistance awards and a recipient receiving a DOC financial assistance award must comply and

require each of its subrecipients employed in the completion of the project to comply with the

ST&Cs.

5. Research Terms and Conditions (RT&Cs) for Federal awards. The RT&Cs for Federal Awards

address and implement the Uniform Guidance issued by OMB. The RT&Cs provide

supplementary guidance and include flexibility for additional individual agency clarification

through the incorporation of agency specific requirements.

OMB Memorandum M-20-09 (Guidance Regarding Federal Grants and Executive Order 13798), “Religious

organizations are entitled to compete on equal footing for Federal financial assistance used to support government

programs. Generally, such organizations are not required to alter their religious character to participate in a

government program, nor to cease engaging in explicitly religious activities outside the program, nor effectively to

relinquish their Federal statutory protections for religious hiring decisions. [Grants Officers] have meaningful tools

to address public recipients' unlawful discrimination on the basis of religious character in the issuance of sub-

awards of Federal grant funds – up to and including terminating the grant and initiating proceedings to debar the

recipient from being eligible in the future to receive Federal grants, contracts, or subsidies. [DOC Grants Offices]

administering a Federal grant program shall take all appropriate action, in a manner consistent with applicable law,

to ensure that public grantees do not discriminate against applicants for sub-grants on the basis of their religious

character. Such action may include, but is not limited to, using the risk mitigation provisions set forth in 2 C.F.R. §

200.207 and the enforcement provisions set forth in 2 C.F.R. § 200.338, as appropriate.”

20 April 2021

6. For awards designated on the Form CD-450 (Financial Assistance Award) as Research, both the

ST&Cs and the RT&Cs as implemented by the Department, apply to the award. The RT&Cs as

well as the Department’s implementation statement, agency specific requirements, prior

approval matrix, subaward requirements, and national policy requirements are posted on the

National Science Foundation’s website

. The ST&Cs and the RT&Cs are generally intended to

harmonize with each other; however, where the ST&Cs and the RT&Cs differ in a Research

award, the RT&Cs prevail, unless otherwise indicated in a specific award condition.

7. Order of Precedence. The following is the order of legal precedence for grants and cooperative

agreements. There should be no conflicting guidance but, in the event of a discrepancy, the

order of precedence for DOC grants and program officials is listed in descending order: public

laws, regulations, applicable notices published in the Federal Register, EOs, OMB circulars, DOC

ST&Cs, operating unit standard award conditions (if any), and specific award conditions.

[Note: Specific award conditions may take precedence over DOC ST&Cs, on a case-by-case basis, when

allowed by the ST&Cs, statute, or regulation.]

[Note: An annual appropriation act can include general provisions stating national policy requirements

that apply to the use of financial assistance funds appropriated by the act. Because these requirements

can be of limited duration and because they can vary from year to year and from one agency’s

appropriations act to another agency’s appropriations, the Grants Officer must know the agency or

agencies and fiscal year(s) of the appropriation being obligated and may need to consult the FALD or the

Budget Office if the requirements applicable to those appropriations are unknown.]

[Note: DOC or individual operating units may adopt further requirements and policies related to

research involving human subjects.]

20 April 2021

3. GLOSSARY OF ACRONYMS AND DEFINITIONS

Refer to the Uniform Guidance, Subpart A (Acronyms and Definitions) for an expanded record of

definitions and acronyms used in the Federal financial assistance community.

A. Acronyms

AGC/ADTRAX – Office of the Assistant General Counsel for Administration and Transactions

AGC/L&R – Assistant General Counsel for Legislation and Regulation, DOC

ASAP – Automated Standardized Application for Payment

BAA – Broad Agency Announcement

CAIVERS – Credit Alert Interactive Voice Response System

CENSUS – U.S. Census Bureau, Operating Unit of DOC

CFO/ASA – Chief Financial Officer and Assistant Secretary for Administration

CFR – Code of Federal Regulations

CRADA – Cooperative Research and Development Agreement

DAO - Department Administrative Order, DOC

DOC - Department of Commerce

DOO - Department Organization Order, DOC

EDA - Economic Development Administration, Operating Unit of DOC

EO - Executive Order, White House

EPLS – Excluded Parties List System. The EPLS is now referred to as “SAM Exclusions” and incorporated

into the System for Award Management (SAM)

FALD - Federal Assistance Law Division, DOC

FBO - FedBizOpps (Federal Business Opportunities)

FFATA – Federal Funding Accountability and Transparency Act of 2006 or Transparency Act (Pub. L. No.

109-282, as amended by section 6202(a) of Pub. L. No. 110-252 (31 U.S.C. § 6101)

FirstNet – First Responder Network Authority

FOIA - Freedom of Information Act

GAO – Government Accountability Office

GSA - General Services Administration

ITA - International Trade Administration, Operating Unit of DOC

MBDA - Minority Business Development Agency, Operating Unit of DOC

MOU - Memorandum of Understanding

NIST - National Institute of Standards and Technology, Operating Unit of DOC

NOAA - National Oceanic and Atmospheric Administration, Operating Unit of DOC

NOFO – Notice of Funding Opportunity

NTIA - National Telecommunications and Information Administration, Operating Unit of DOC

OCA - Office of Congressional Affairs, DOC

OAM - Office of Acquisition Management, DOC

OGC - Office of General Counsel, DOC

OIG - Office of Inspector General, DOC

OLIA - Office of Legislative and Intergovernmental Affairs, DOC

OMB - Office of Management and Budget, White House

PA - Privacy Act

PRA - Paperwork Reduction Act

RFA - Request for Applications

20 April 2021

RIN - Regulation Identification Number

SAM - System for Award Management

SPOC - Single Point of Contact

ST&Cs - DOC Financial Assistance Standard Terms and Conditions

RT&Cs - Research Terms and Conditions for Federal awards

TOP - Treasury Offset Program

U.S.C. - United States Code

B. Definitions

1. Administrative Offset. Satisfying a debt by withholding funds payable by the United States

(including funds payable by the United States on behalf of a state government) to, or held by the United

States for, a person to satisfy a debt owed by the person. The term “administrative offset” can include,

but is not limited to, the offset of Federal salary, vendor, retirement, and Social Security benefit

payments. The terms “centralized administrative offset” and “centralized offset” refer to the process by

which the Treasury Department's Financial Management Service offsets Federal payments through the

Treasury Offset Program.

2. Amendment.

a. For a Federal award, an amendment is a substantive change made to an award. Examples

of an amendment to a Federal award include, but are not limited to, the following: continuation,

renewal amendment, supplemental, no-cost extension, and budget revision.

b. For a Notice of Funding Opportunity (NOFO), an amendment is any change to a

competition’s substantive application requirements, including but not limited to eligibility

requirements, required forms, change of dates, and the evaluation criteria.

3. Assistance Listings. Assistance Listings refers to the publicly available listing of Federal

assistance programs managed and administered by GSA, formerly known as the Catalog of Federal

Domestic Assistance (CFDA). It is the single, authoritative, governmentwide comprehensive source of

Federal financial assistance program information produced by the executive branch of the Federal

Government.

4. Broad Agency Announcement (BAA). A broad agency announcement is a notice of the potential

availability of funds that: (a) is general in nature; (b) identifies areas of programmatic interest; (c)

includes criteria for selecting proposals; (d) seeks the participation of any interested members of the

public, and, (e) excludes currently existing assistance programs.

5. Budget/Cost Analysis. The review and evaluation of the reasonableness, allowability, and

allocability of an applicant’s proposed budget data and of the judgmental factors applied in projecting

the estimated costs.

6. Budget Period (previously referred to as the Funding Period). The time interval from the start

date of a funded portion of an award to the end date of that funded portion during which recipients are

authorized to expend the funds awarded, including any funds carried forward or other revisions

pursuant to 2 CFR § 200.308 (Revision of budget and program plans). See Budget in 2 CFR § 200.1

(Definitions). There may be one or more budget periods within one Period of Performance.

20 April 2021

7. Competitive Award. An award made with discretionary funds after a solicitation of proposals

has been published in a NOFO posted at Grants.gov and where DOC chooses a proposal based on merit

review and the application of established evaluation and selection criteria. The DOC may also treat as

competitive an award that was solicited and reviewed through another federal agency’s competitive

process or through a competitive solicitation process developed by several federal agencies acting in

partnership.

8. Competitive Award Program. A financial assistance program under which funds are awarded

on the basis of merit or need and to which an applicant is not entitled as a matter of law.

9. Continuation. An amendment that provides continued funding within the approved period of

performance. Unlike a renewal amendment, a continuation does not extend the period of performance;

rather, it provides additional funding within an already existing period of performance. Continuation

amendments are used with multi-year awards.

10. Delinquent Debt. A debt that has not been paid by the date specified in the agency’s initial

written demand for payment or applicable agreement or instrument (including a post-delinquency

payment agreement) unless other satisfactory payment arrangements have been made.

11. Department or DOC. United States Department of Commerce (DOC), unless otherwise

indicated. As used in this Manual, “Department” or DOC includes the Office of the Secretary of

Commerce and the operating units.

12. Discretionary Award Program. A financial assistance program under which DOC can exercise its

judgment in selecting to whom the funds are awarded.

13. Discretionary Funds. Funds for which DOC can exercise its judgment in selecting to whom the

funds are awarded.

14. Fixed Year Funds. Funds, by the terms of an Appropriations Act, available for obligation only for

a specified period of time. Most often this will be a one-year period, but it may be for several years.

This term is synonymous with “time limited funds” as used in this Manual.

15. Grants.gov. The official Federal government website that allows organizations to electronically

find and apply for Federal financial assistance.

16. Grants Officer. The DOC official who is responsible for all business management and

administrative aspects of a Federal award and the DOC official with the delegated authority to award,

amend, administer, close out, suspend, and/or terminate grants and cooperative agreements and make

related determinations and findings. For those operating units with delegated Grants Officer

responsibilities (EDA, NIST, OS and NOAA), the term Grants Officer, as used in this Manual, means the

Grants Officers who are identified by the head of the operating unit.

17. Head of Operating Unit. The head of an operating unit includes Secretarial Officers and the

heads of primary operating units, as defined in Department Organization Order (DOO) 1-1. The heads of

some operating units are Program Secretarial Officers; in other cases, they are other officers who report

and are responsible to a Program Secretarial Officer or directly to the Secretary or Deputy Secretary, as

may be specified.

20 April 2021

18. Institutional Award. A grant or cooperative agreement under which funds are awarded based

on competition with the intent to maintain a long-term partnership between DOC and the recipient so

that new awards may be made on a noncompetitive basis if the recipient performs satisfactorily and

submits the appropriate application document, and if the results of the periodic reviews validate the

effectiveness and continued desirability of the use of institutional awards for the program.

19. Insular Area. The areas defined by Public Law 95-134, Title V, § 501 (1977), as amended (48

U.S.C. § 1469a), including the Virgin Islands, Guam, American Samoa, and the islands formerly referred

to as the “Trust Territory of the Pacific Islands”: the Commonwealth of the Northern Mariana Islands,

the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

20. Interested Party. Any officer, employee or member of the board of directors or other governing

board of a non-Federal entity, including any other parties that advise, approve, recommend, or

otherwise participate in the business decisions of the recipient, such as agents, advisors, consultants,

attorneys, accountants or shareholders. This also includes immediate family and other persons directly

connected to the Interested Party by law or through a business arrangement.

21. Merit Review. A thorough, consistent, and independent examination of an application based on

pre-established criteria by persons knowledgeable in the field of endeavor for which support is

requested. A merit review must be conducted by an impartial, objective, unbiased individual with the

requisite expertise, knowledge, and experience in a technical field who can evaluate or assess a proposal

for its value, quality, and likelihood of success. One who conducts a merit review must not have a

conflict of interest, or the appearance of a conflict of interest, regarding any application under his or her

review.

22. Multi-year Award. A financial assistance award which has a period of performance of more

than 12 months, which is partially funded as of the award date, and is subsequently funded in

increments. This does not include awards with a period of performance of more than 12 months which

are fully funded as of the award date.

23. No-Cost Extension. An amendment that extends the period of performance and budget period

with no additional funding.

24. Noncompetitive Award. An award made with discretionary funds but without the benefit of

competition.

25. Nondiscretionary Award Program. A financial assistance program under which a statute

specifically names the intended recipient(s) or limits eligibility to all members of a particular class or

classes of recipients.

26. Nondiscretionary Funds. Funds for which a statute specifically names the intended recipient or

limits the eligibility to all members of a particular class or classes of recipients.

27. Operating Unit. Organizational entities outside the Office of the Secretary charged with

carrying out specified substantive functions (i.e., programs) of the DOC, as defined in DOO 1-1. The

operating units are the components of the DOC through which most of its substantive functions are

carried out and are delegated authority by the Secretary of Commerce to award financial assistance.

This term is synonymous with “funding agency” as used in this Manual.

20 April 2021

28. Period of Performance. The total estimated time interval between the start of an initial Federal

award and the planned end date, which may include one or more funded portions, or budget periods.

Identification of the period of performance in the Federal award per 2 C.F.R. §200.211(b)(5) does not

commit the awarding agency to fund the award beyond the currently approved budget period.

29. Pre-Award Period. The approved period of time allotted to the award prior to the beginning of

the period of performance as listed on the Form CD-450 (Financial Assistance Award).

30. Program Officer. The DOC official responsible for the technical, scientific, or other

programmatic aspects of an award/program.

31. Renewal Amendment. An amendment that extends the period of performance and budget

period and adds additional funds to the award.

32. Renewal Award. Renewal award means an award made subsequent to an expiring Federal

award for which the start date is contiguous with, or closely follows, the end of the expiring Federal

award. A renewal award’s start date will begin a distinct period of performance.

33. Revolving Loan Fund. Established in 1975 to create and retain jobs in distressed communities,

the EDA Revolving Loan Fund (RLF) provides competitive grants to eligible recipients to start or

recapitalize local RLF’s. Those RLFs in turn provide gap financing at competitive rates to borrowers

otherwise unable to access affordable capital. Eligible uses include real estate, equipment, fixed assets,

and working capital.

34. Selecting Official. A senior program official of the operating unit who is authorized to make

final selection recommendations to the Grants Officer for final approval of award applications.

35. System for Award Management (SAM). SAM is the Federal repository into which applicants

and recipients of financial assistance awards must input certain information. It is a free database hosted

by GSA providing information on government procurement and non-procurement entities and

functions.

36. System for Award Management Exclusions (SAM Exclusions). One aspect of SAM is the list of

excluded parties. The excluded parties list includes all contractors, individuals, and grantees that are

ineligible from bidding or receiving government contracts, grants, or any federal assistance

programs. Government employees are required to use SAM for many purposes, one of which is to verify

potential contractors and grantees are eligible for award or receipt. This function was formerly housed

under the Excluded Parties List System which is now incorporated into SAM.

37. Subcontract. A contract under an award by a recipient’s or a sub-recipient’s contractor.

38. Supplemental. An amendment that provides funding over and above the approved budget

during the current budget period.

20 April 2021

39. Suspension of Award. An enforcement action to temporarily suspend Federal sponsorship (as

opposed to suspension of payments) under the award pending corrective action by the non-Federal

entity or a decision to terminate the award. All activities under the award must cease and no costs may

be incurred by the recipient during the suspension of award, unless the Federal awarding agency or

pass-through entity expressly authorizes them in the notice of suspension or subsequently.

40. Suspension of Payment. An action to temporarily withhold payment of funds under the award

pending correction of identified deficiencies by the non-Federal entity. Activities under the award may

continue, and the Non-Federal entity may continue to incur costs during the suspension of payment.

41. Write-Off. Termination of debt collection activity under the Federal Claims Collection

Standards.

20 April 2021

4. RESPONSIBILITIES IN GRANTS ADMINISTRATION

A. Chief Financial Officer and Assistant Secretary for Administration

1. Pursuant to DOO 10-5 (Chief Financial Officer and Assistant Secretary for Administration), the

DOC CFO/ASA has been designated by the Secretary of Commerce to act as the Grants Officer for the

Department and is responsible for developing and implementing policies, standards, and procedures for

the administration of all financial assistance programs of the DOC.

[Note: Under DOO 10-4 (Assistant Secretary for Economic Development) EDA has been delegated

authority by the Secretary of Commerce to administer the Public Works and Economic Development Act

and pertinent provisions of the Trade Act and the America Creating Opportunities to Meaningfully

Promote Excellence in Technology, Education, and Science (COMPETES) Reauthorization Act of 2010,

among other matters. This includes grants administration for such programs. In addition, NIST and

NOAA are delegated through DOOs 30-2A (National Institute of Standards and Technology) and 10-15

(Under Secretary of Commerce for Oceans and Atmosphere and Administrator of the National Oceanic

and Atmospheric Administration) respectively, the authority to perform functions in the Federal Grant

and Cooperative Agreement Act, 31 U.S.C. §§ 6301-08 with regard to making grants and cooperative

agreements.]

2. The CFO/ASA hereby delegates to the Grants Officer the authority to approve exceptions to

awards subject to the provisions of 2 CFR § 200.102 (Exceptions).

[Note: This delegation of authority may not be re-delegated by the Grants Officer.]

B. Office of Acquisition Management (OAM)

OAM is delegated the authority to develop, issue and oversee implementation of policies and

procedures for the administration of DOC financial assistance programs (including grants, cooperative

agreements, loans, and loan guarantees) and to oversee implementation of DOC's audit follow-up

program with respect to financial assistance programs. The OAM Director also serves as the Debarring

and Suspending Official for DOC nonprocurement actions, and as the Chair of the DOC Grants Council,

which is the governing body for enterprise wide policy development and implementation in the DOC for

Federal assistance programs. DOO 10-5 § 1.02.f states that the CFO/ASA “assigns responsibility for

financial assistance administrative and operational policies to the Director for Acquisition

Management.” The Financial Assistance Policy and Oversight Division (FAPOD), located within OAM, is

responsible for the administrative and operational policies for financial assistance for DOC.

The following functions will be performed by FAPOD:

1. Provide guidance, interpretations, and technical assistance on regulations, policies, and

procedures for the administration of financial assistance to Grants Officers, Program Offices, and others

as needed.

2. Develop, prepare, coordinate, and submit notices of Department-wide proposed rulemaking,

interim final rules, final rules, and other Federal Register notices regarding financial assistance matters

to the Office of Assistant General Counsel for Legislation and Regulation (AGC/L&R), with copies of

comments and/or clearances received during coordination.

20 April 2021

3. Provide to OMB and other Federal agencies, after review and comment by appropriate

operating units and other Departmental staff, consolidated DOC comments concerning proposed new

government-wide policies and procedures and proposed revisions to policies and procedures related to

financial assistance issues.

4. Notify appropriate operating unit and DOC staff of changes and revisions to government-wide

financial assistance policies and procedures or other matters related to financial assistance.

5. Conduct or participate in reviews, task force groups, or other assessments to assure compliance

with policies and procedures established for the administration of DOC financial assistance programs.

6. Evaluate, in consultation with other offices as appropriate, status updates provided on

implementation of financial assistance audit findings.

7. Develop reports on implementation activities of procurement and financial assistance audit

recommendations as necessary for reporting to Congress by the Secretary of Commerce.

8. Serve as the DOC liaison and single point of contact for DOC with OMB, the Government

Accountability Office, the Department of the Treasury, Health and Human Services (including

Grants.gov), and other agencies on financial assistance matters.

9. Coordinate the collection and submission of the information for DOC financial assistance

transactions to the government-wide database, USASpending.gov.

10. Prepare, issue, and maintain this Manual, and interpret its policies, standards, and procedures.

11. Consider requests for waivers to the provisions of this Manual, as permitted by governing

statutes and regulations, and notify the Head of the Operating Unit of the decision to approve or deny

the request. If a waiver is denied, a written explanation will be provided to the requester.

12. Convene Department-wide Grants Council meetings.

13. Review in a timely manner all materials prepared pursuant to the requirements of this Manual

for conformance to financial assistance regulations, policies, standards, and procedures. These reviews

will cover all financial assistance programs of the Department and will include, but not be limited to, the

following documents.

a. Proposed Federal Register notices, when required and related to administration of financial

assistance programs, including announcements of funding availability, information collection

activities, and program regulations;

b. Application kits/packages that contain any program-specific forms or requirements beyond

those listed in Chapter 9 of this Manual;

c. Proposed publications that include financial assistance award management or

administration procedures or instructions with respect to individual programs or groups of

programs; and

20 April 2021

d. Other documents as appropriate.

14. Coordinate with the appropriate Grants Officers, program offices and the Federal Assistance

Law Division (FALD), within the Office of the Assistant General Counsel for Administration and

Transactions (AGC/ADTRAX), on the establishment of program numbers and updating of text and

financial assistance information in the Assistance Listings, formerly known as the Catalog of Federal

Domestic Assistance (CFDA).

C. Office of General Counsel

Pursuant to DOO 10-6 (Office of the General Counsel), the functions of the OGC include the

preparation or examination for legal form and effect of all instruments entered into by the DOC,

including grants and cooperative agreements. These agreements create legal rights and obligations

between the government and the recipient. Grant and cooperative agreement instruments must be

authorized under specific statutory authority, may require the issuance by publication in the Federal

Circulars, and the Uniform Guidance. The award, administration, and audit of these agreements may

present legal issues, rights, liabilities, and the possibility of disputes, which presents the need for timely

legal advice and guidance.

1. The OGC provides legal support in the following financial assistance related areas:

a. AGC/L&R coordinates and manages compliance with regulatory requirements. This includes

coordination, clearance, and submission of items proposed for publication in the Federal Register in

accordance with the requirements of DOO 10-6, Section 4.01, Subsections a. and g.

b. FALD provides financial assistance related legal representation, advice, and support to

Grants Officers and Specialists, Program Officers, OAM, the Nonprocurement Debarring Official, the

CFO/ASA, and others. The following functions are performed by FALD:

(1) Legal representation before the Government Accountability Office and administrative

tribunals. FALD also provides direct support to the Grants Officer and to the AGC for Litigation,

Employment and Oversight (AGC/LEO) in Federal court litigation regarding the award,

administration, and cost disallowance under grants and cooperative agreements;

(2) Legal analysis to Program Officials and Grants Officers of proposed legislation, authorizing

statutes and appropriations acts, including implementation by regulation, for assistance programs;

(3) Participation, as appropriate, in compliance reviews, task force groups, or other

assessments to ensure compliance with all laws, EOs, regulations, and policies governing DOC

financial assistance; and

(4) Legal advice and services to the Debt Workout Groups in accordance with the DOC Credit

and Debt Management Operating Standards and Procedures Handbook, which currently may be

located on the DOC website at http://www.osec.doc.gov/ofm/credit/cover.html

. This includes

assistance with final terminations, settlements, compromises of claims, and referrals of claims to the

Department of Justice for collection. The General Litigation Division (Gen Lit), within AGC/LEO, also

provides legal advice and services relative to debt workout, debt collection, and bankruptcy. In

20 April 2021

addition, the Real Property and Environmental Law Division (RPELD), within AGC/ADTRAX is

available for consultation regarding property and environmental concerns laws (e.g., the National

Environmental Policy Act of 1969 and state analogs, and the Comprehensive Environmental

Response, Compensation and Liability Act of 1980). Coordination with Gen Lit and RPELD may be

pursued directly by Program Officials or Grants Officers or may be coordinated through FALD.

[Note: EDA’s Office of Chief Counsel (OCC) provides direct supporting legal services with respect to

grants and cooperative agreements to EDA program and grants officials. Therefore, references to

FALD throughout this Manual generally include EDA counsel with respect to EDA programs. FALD

assists, reviews, and provides oversight of EDA counsel's legal advice and guidance on DOC and

government-wide requirements.]

2. The following decisions or actions raise significant legal issues and require FALD clearance:

a. Proposed rules, interim rules, final rules, Federal Register notices of availability of funds,

when required, NOFOs, RFAs, and all other federal funding announcements relating to financial

assistance;

b. Notices of nonprocurement debarment or suspension, determinations, and settlements

under 2 CFR Part 1326; and

c. Audit appeal determinations under DAO 213-5 (Audit Resolution and Follow-Up) are

submitted to FALD for review and recommendation before clearance by the AGC/ADTRAX.

3. The following actions, determinations, and/or documents, for which decision-making authority

rests with the responsible Program Official, Grants Officer, or the Director, OAM, require FALD review

and opportunity to comment:

a. Application kits/packages, technical evaluation forms, and conflict of interest forms for

reviewers. This includes other documents which establish procedures for awards under a financial

assistance program;

b. Packages summarizing the competitive review of discretionary funds in accordance with

Chapter 8 of this Manual. These packages should be reviewed by FALD as early as possible prior to

approval of awards;

c. Proposed financial assistance competitive awards where the amount of Federal funding

exceeds the simplified acquisition threshold, which is currently $250,000, and all noncompetitive

awards, see also 41 U.S.C. § 134 (the simplified acquisition threshold). OGC will consider requests to

raise the $250,000 threshold or to waive the legal review requirement for competitive awards on a

program-by-program basis, with the concurrence of the program office, for on-going programs that

have not had significant legal issues or audit problems in the past three years. OGC will also

consider requests to change the requirement for legal review of individual amendments to

institutional awards that are under the simplified acquisition threshold, but where the underlying

award totals more than $250,000, as appropriate. OGC review is not required for continuation

amendments under multi-year awards, unless the amendment involves substantive changes to the

terms and conditions of an award, significant changes to the scope of work or budget, change in

program priorities, enforcement actions, or other noteworthy actions. Grants Officers may submit a

20 April 2021

written request to the FALD Chief setting forth a justification for raising the award review threshold

or for waiving the FALD review requirement, or FALD staff may recommend such actions to the

FALD Chief, who may provide written approval of such a request when warranted. Contact FALD for

further information;

d. Interagency or other special agreements (IAAs) executing the transfer of funds in or out for

the award of a grant or cooperative agreement. IAAs can include memoranda of agreement,

memoranda of understanding, joint project agreements, interagency purchase orders that

document acceptance by all parties, or any other document that details the terms of an agreement

and the parties’ acceptance. Agreements can transfer funds from one party to the other, bind one

or both parties to commit funds or resources to a grant or cooperative agreement, or not involve

any resources but describe specific responsibilities under the grant or cooperative agreement. All

IAAs require review and approval by the AGC/ADTRAX, General Law Division (GLD).

[Note: When DOC provides Federal funds to another Federal agency that is administering a

collaborative project with the Department, the agreement governing that transfer of funds must

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits

in a financial assistance award, unless statutorily authorized. See Chapter 9 of this Manual.]

e. Pre- and post-award risk assessments resulting in the imposition of additional specific award

conditions pursuant to 2 CFR § 200.206 (Federal awarding agency review of risk posed by applicants)

and §200.208 (Specific conditions);

f. Notices of suspension or termination of awards;

g. Replacement recipients, assignments, and novations, recipient name changes; and

h. Questions regarding selecting officials’ involvement as an independent reviewer.

4. It is in the best interest of the Department that Program Officials and Grants Officers consider all

legal ramifications of key decisions related to the award and administration of financial assistance. The

decision-making authority rests with the responsible Program Officer, Grants Officer, or OAM. The

following are examples of actions/decisions/documents regarding which FALD may, upon request,

provide coordinated legal review and comment:

a. Budget certification as to the availability of funds, which shall include representations on the

following matters, when appropriate:

(1) Time limitation of funds (annual or time-limited funds vs. no-year funds);

(2) Appropriations act; and

(3) Any other legislative restrictions on appropriations.

b. Questions pertaining to whether Paperwork Reduction Act (PRA), 44 U.S.C. § 3501,

clearance is required for a proposed information collection in connection with a financial assistance

program, in addition to FALD review of proposed PRA packages being submitted for OMB clearance;

20 April 2021

c. Disputes relating to the terms of the award in discussions or written communications on

aspects of the grant, particularly on occasions when other parties associated with the award are

represented by their own attorneys;

d. Audit resolution determinations establishing a debt, claim, or other adverse action against a

recipient. FALD can also provide services as a mediator, facilitator, or third-party negotiator for

reaching audit resolution determinations when agreement between the Grants Officer, Program

Official, and OIG Auditor (when applicable) cannot be reached;

e. Comments prepared by DOC officials on proposed rules, interim rules, and revisions to OMB

Circulars applicable to Federal assistance including, but not limited to, the award, administration,

and audit of grants and cooperative agreements;

f. Congressional, Freedom of Information Act (FOIA), and executive correspondence relating

to financial assistance;

g. Amendments to awards involving significant or unique issues; and

h. When there is a need for legal interpretation or other legal advice, and any other issues with

potential legal ramifications.

D. Office of Inspector General

Pursuant to DOO 23-1 (Office of the Inspector General), the OIG is assigned the function of carrying

out internal, external, financial statement, information and financial system, and special audits affecting

the programs and activities of the DOC. The following functions will be performed by the OIG:

1. Conduct, supervise, or coordinate Inspector General (IG) audits, inspections, or investigations

relating to DOC financial assistance programs and operations.

2. Prepare reports on audit resolution activities as necessary for the IG's Semiannual Report to

Congress.

3. Evaluate, in consultation with other offices as appropriate, responses and proposed actions on

OIG recommendations.

4. Participate with the Grants Officer in the resolution of OIG audits conducted on financial

assistance awards funded by DOC.

5. Review and advise on the adequacy of the financial management systems maintained by

applicants and recipients, the projected or claimed costs, and the projected or reported performance.

6. Provide guidance about audit related matters to Grants Officers, Program Officers, their staffs,

OAM, and others as needed.

7. Participate as appropriate in reviews, task force groups, or other assessments to assure

compliance with policies and procedures established for the administration of DOC grant programs.

20 April 2021

8. Recommend policies and procedures to promote economy and efficiency, and to prevent and

detect fraud, waste, and abuse in DOC financial assistance programs and operations.

E. Finance and Budget Office

The following financial and accounting duties must be assigned and fulfilled in connection with

financial assistance programs and individual awards:

1. Certify funding availability (this includes assurance that the budgetary line item from which the

funds originate is compatible with the financial assistance program under which the funds will be

obligated). If funds for a particular award were transferred from another Federal agency, a copy of the

interagency agreement reflecting the statutory authority for the transfer of funds to DOC and the

transferring agency’s statutory authority to provide financial assistance for this purpose must also be

included as part of the official award file for the subject action;

2. Provide documentation regarding time limitation of funds (e.g., annual funds).

3. Provide citation and, when known, identification of the intended recipient when there is

statutory or Congressional direction regarding the funding of a project identified in an appropriations

act or provided in the House, Senate, or Conference Appropriations Committees reports accompanying

an appropriations act. If the project is identified in the report language and not in the appropriations

act, consult FALD to identify the independent statutory authority to make a grant for this purpose.

4. Notify the Grants or Program Officer, as appropriate, of any other restrictions on appropriations.

5. For updates to the Assistance Listings, formerly known as the Catalog of Federal Domestic

Assistance (CFDA), bureaus will work closely with their respective budget offices to validate data

accuracy and integrity.

6. Provide full accounting support and financial advice to Grants Officers, Program Officers, the

operating unit, and others as needed;

7. Provide financial data and reports on grants as requested by other Federal agencies, the

operating unit, or the Grants Officer;

8. Record the financial transactions associated with each financial assistance award from inception

to close-out of the final financial report, including obligation and deobligation of funds, payments,

establishment of accounts receivable, and regularly scheduled billings;

9. As recommended by appropriate grants officials, process requests and documentation for

disbursement of funds to be issued by electronic funds transfer or by Treasury check when necessary in

accordance with the provisions of the Debt Collection Improvement Act of 1996;

10. Prepare appropriate billing notice for audit-related and other accounts receivable stemming

from financial assistance awards, and promptly notify the Grants Officer and the Program Officer when

accounts receivable become delinquent;

20 April 2021

11. Provide access to a listing of delinquent debtors to the Grants Officer for each DOC operating

unit and to OAM; and

12. Perform the functions normally assigned to the Finance/Accounting Officer, including those

stipulated in the DOC Credit and Debt Management Operating Standards and Procedures Handbook.

F. Grants Office

The Grants Officer oversees the business management and administrative aspects of grants and

cooperative agreements. The Grants Officer or designee will coordinate as appropriate with the

Program Officers and other appropriate Departmental offices. Grants Officers shall carry out the

responsibilities identified in Paragraphs 1, 2, 3, and 4 of this section without any re-delegation to other

parties. The responsibilities outlined in Paragraphs 5 through 27 may be further delegated by the Grants

Officer to appropriate members of the Grants Officer’s staff. Although these actions may be delegated

to appropriate members of the Grants Officer’s staff, these duties ultimately remain the responsibilities

of the Grants Officer.

[NOTE: The Grants Officer should know what functions are inherently governmental and critical.

Contractors and grantees cannot perform inherently governmental and critical functions and are

prohibited from making determinations, approving, and directing functions that should be done by

Federal officials (e.g., acquisition planning, determining minimum needs of the Federal government,

deriving contract cost estimates, voting on contract evaluation panels or selecting contract awardees).

Additionally, a contractor cannot make final contracting decisions, including determining award fees,

terminations for convenience or cause or order any changes under a contract. Contractors may provide

support to Federal government decision makers in each of these areas but cannot make the actual

determinations. For a list of inherently governmental functions, read the OMB Office of Federal

Procurement Policy Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11–01

(Performance of Inherently Governmental and Critical Functions), available at

http://www.gpo.gov/fdsys/pkg/FR-2011-09-12/pdf/2011-23165.pdf

Grants administration responsibilities are as follows:

1. Approve awards and amendments that obligate or deobligate funds.

2. Suspend or terminate individual awards, excluding debarment or suspension of a recipient as

provided in 2 CFR Part 1326.

3. Approve final pre-award risk assessment (completed in accordance with 2 CFR § 200.206

(Federal awarding agency review of risk posed by applicants)) and the imposition of specific award

conditions (in accordance with 2 CFR § 200.208 (Specific conditions)).

4. Approve, as appropriate, exceptions pursuant to the delegation of authority from the CFO/ASA

in accordance with this chapter.

5. Provide grants administration guidance and support to Program Officers, recipients, and others

as needed.

6. Maintain the official award files (electronic and/or hard copy).

20 April 2021

7. Ensure that each financial assistance award is prepared and administered in accordance with

applicable statutes, regulations, OMB guidance, EOs, and DOC policies.

8. Perform cost analyses of proposed budgets to assure that costs in the award budget are

reasonable, allowable, and allocable in accordance with the applicable cost principles.

9. Ensure that pre-award administrative procedures are carried out, including but not limited to

the following:

a. Provide assurance that the recipient was competitively selected by the appropriate

independent or technical review process or that appropriate noncompetitive selection procedures

were followed in accordance with Chapter 8 of this Manual and that the official award file contains

the required documentation with respect to selection procedures;

b. Review of any justification for noncompetitive award of discretionary funds and make

determination of adequacy of that justification and the basis for the justification;

c. Provide written verification concerning an outstanding delinquent receivable or debt;

d. If applicable, review of any available Single Audit (see Subpart F to 2 CFR Part 200) or other

audit report;

e. Recommend to the Grants Officer and to the Program Official the appropriate funding

instrument to be used in a particular transaction, i.e., grant, cooperative agreement, or contract and

development of appropriate specific award conditions defining the role of the Federal Government

when the level of involvement is determined to be substantial and award of a cooperative

agreement is warranted;

f. Include DOC ST&Cs in awards, as applicable, as well as any operating unit-specific standard

and/or specific award conditions required to protect the Federal Government's interest;

g. Examine proposed pre-award costs to determine necessity and applicability to project

objectives and recommend to the Grants Officer the approval or disapproval of the pre-award costs,

as appropriate; and

h. Collect all necessary internal clearances (such as OIG, OGC, etc.) for inclusion in the official

file.

10. Ensure the recipient's compliance with award conditions and recommend appropriate action to

the Grants Officer when there is non-compliance.

11. Review, as necessary, subcontracts and subgrants by the recipient to determine compliance

with applicable administrative requirements, requests for foreign travel, and requests for extension of

reporting periods.

20 April 2021

12. Receive and review financial reports submitted by the recipient to ensure that:

a. Recipients are expending funds at an appropriate rate and that matching requirements are

being met;

b. Federal disbursements are comparable with the period covered by requests for payment;

c. Recipients are not maintaining excess cash on hand;

d. Reports submitted by the recipient agree with DOC accounting records of disbursements;

e. Reports contain information on indirect costs and program income if these items are

included in the approved budget; and

f. Reports are completed correctly.

13. Review and approve requests for advance or reimbursement or contact the recipient if payment

cannot be made as requested.

14. Provide proper notice to any recipient in advance of suspending payments, including

information on how to remedy the suspension, whether it is of the award or of award payments, and

the assurance that payments will be resumed once the recipient has met requirements.

15. Review recommendations for no-cost amendments (which include, but are not limited to,

budget revisions, time extensions to the period of performance, or changes in the work schedule or key

personnel) and approve or notify the Program Office and/or recipient of reason for disapproval.

16. Manage disposition of real property, personal property or supplies acquired in whole or in part

under a financial assistance award by ensuring that the appropriate Property Management Officer is

notified of the existence, nature, value, and location of said property under a grant available for

disposition, as appropriate.

17. Ensure that the award is administratively closed out, and, as applicable, that the official award

file is held in the appropriate records holding facility for the appropriate time period before the file is

destroyed.

18. Review the audit report, the recipient’s response, and the Program Officer's comments and

prepare the audit resolution proposal in accordance with DAO 213-5.

19. Notify the recipient of any account receivable established and provide required information

about how to make payment as well as consequences of nonpayment.

20. Review and process appeals of financial assistance audit resolution determinations in

accordance with the provisions of DAO 213-5.

20 April 2021

21. Monitor open financial assistance audit recommendations; ensure that open recommendations

are properly implemented.

22. Review in a timely manner the following documents for conformance to government-wide and

DOC financial assistance administrative requirements:

a. Proposed Federal Register notices, as required, and Notices of Funding Opportunities;

b. Application kits/packages;

c. Publications (including information on the DOC, operating unit, or program Internet

website) that include information on financial assistance award management or administration;

d. Proposed requests for OMB clearance of information collection activities under financial

assistance programs; and

e. Other documents as appropriate.

23. Ensure that quarterly financial assistance transactions are reported accurately and in a timely

manner to USASpending.gov and all other government reporting systems, as appropriate.

24. Refer proposed nonprocurement suspension and debarment actions to the Department's

Debarring and Suspending Official in accordance with provisions contained in 2 CFR Part 1326.

25. Assure that any FOIA requests for documents in an official award file are reviewed and released

or withheld in accordance with the provisions of the FOIA. If the Grants Officer is not authorized by

agency regulations to withhold documents under the FOIA, the Grants Officer must provide responsive

documents to the appropriate initial denial authority.

26. Notify the recipient when the award is close to completion and provide guidance for close-out

of the award.

G. Liaison Responsibilities

Each operating unit that provides funding for financial assistance awards shall establish a central

liaison to interact with OAM. Each liaison is responsible for performing the following primary duties

with respect to financial assistance.

1. Policy Implementation.

a. Establish procedures that support the requirements of this Manual and ensure conformance

with the provisions of this Manual;

b. Review relevant draft regulations;

c. Ensure each program’s compliance with Federal, Departmental, and operating unit grants

administration requirements; and

d. Implement the policy requirements as set forth in this Manual.

20 April 2021

2. Monitoring.

a. Review the operating unit’s grants administration system for compliance with this Manual;

and

b. Review grant forms and other grant documents for compliance with applicable

requirements.

3. Liaison and Coordination.

a. Answer questions and inquiries on grant-related matters;

b. Coordinate, as appropriate, the operating unit’s consolidated funding and other grant-

related activities;

c. Assure appropriate coordination of proposed publications for the Federal Register, as

required, through OAM, OGC, and other required DOC offices; and

d. Disseminate information from OAM to appropriate operating unit personnel and offices.

4. Information Collection, Analysis, and Dissemination. Coordinate preparation and submission of

reports on grant-related matters for DOC.

H. Program Office

The Program Officer, or assigned operating unit component, is responsible for monitoring and

oversight of the work being conducted under an award, such as tracking the recipient’s progress,

comparing the actual accomplishments with the goals and objectives established in the award, and

advising the Grants Officer on all programmatic aspects of the awards.

[NOTE: The Program Officer should know what functions are inherently governmental and critical.

Contractors and grantees cannot perform inherently governmental and critical functions and are

prohibited from making determinations, approving, and directing functions that should be done by

Federal officials (e.g., acquisition planning, determining minimum needs of the Federal government,

deriving contract costs estimates, voting on contract evaluation panels or selecting recipients are also

inherently federal functions). Additionally, a contractor cannot make final decisions, including

determining contract award fees or terminations for convenience or cause. Contractors may provide

support to Federal government decision makers in each of these areas but cannot make the actual

determinations. For a list of inherently governmental functions, read the OMB Office of Federal

Procurement Policy Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11–01

(Performance of Inherently Governmental and Critical Functions), available at

http://www.gpo.gov/fdsys/pkg/FR-2011-09-12/pdf/2011-23165.pdf

The following are programmatic functions to be performed by the Program Office:

1. Provide programmatic guidance and technical assistance to recipients, Grants Officers, and

other officials, as necessary.

20 April 2021

2. Establish programmatic policy within the scope of authorizing legislation and Departmental

goals and objectives.

3. Develop the evaluation process, criteria, and weights or relative values used for competitively

selecting applications.

4. Prepare Federal Register notices, as required, in accordance with Chapter 17 of this Manual,

announcing the availability of funds.

5. Prepare NOFO for posting in accordance with Chapter 17 of this Manual.

6. Prepare, in consultation with the Grants Officer and with FALD, the application package for the

program, including any requests for OMB clearance of information collection activities that may be

required by the program or by individual financial assistance awards under the program.

7. Develop and coordinate the competitive review process in accordance with Chapter 8 of this

Manual, select qualified reviewers who have no conflicts of interest, ensure that each application

receives the appropriate independent or technical and objective review, and verify that the ranking or

selection of applications is based on the published selection criteria.

8. Develop and provide to the Grants Officer written justification for proposed noncompetitive

awards of discretionary funds and provide basis for justification, in accordance with the terms of this

Manual.

9. Receive and review applications and proposals. Also review justifications for compliance with

existing program guidelines, regulations, and legislation, as well as proposed budgets to determine the

reasonableness, necessity, and adequacy of proposed costs for accomplishing the objectives of the

proposed award.

10. Establish criteria for evaluating project performance. See 2 CFR § 200.301 (Performance

Measurement).

11. Provide to the Grants Officer, for the official award file, a complete and accurate funding

recommendation package in accordance with instructions contained in Chapter 9 of this Manual. This

includes the packages summarizing the results of the review process, for both competitive and non-

competitive awards as described in Chapter 8 of this Manual.

12. Provide or make available to the Grants Officer for the official award files: internal memoranda

and all correspondence (scanned or original signatures required when available) regarding specific

award files, recipient performance reports, written evaluations of performance reports and of any on-

site visits.

13. Notify unsuccessful applicants of decision not to fund an application in accordance with Chapter

8 of this Manual.

14. Monitor project activities to ensure that goals are being achieved and the project is being

carried out properly.

20 April 2021

15. Provide written background and recommendations to the Grants Officer on programmatic

issues, such as amendments to the project description or budget.

16. Review and evaluate all reports, including financial, performance or technical reports, property,

and patent reports submitted by the recipient for consistency with the approved project and provide

copies to the Grants Officer.

17. Report to the Grants Officer, within 30 days of discovery, concerning potential or existing

problems, financial inconsistencies, or situations of noncompliance and provide recommendations for

resolution.

18. Monitor the recipient's purchase and use of property acquired under the award or furnished by

the Federal Government under the award, and assist the Grants Officer to ensure compliance with the

Property Standards of the Uniform Guidance (see 2 CFR § 200.310 (Insurance Coverage) through §

200.316 (Property Trust Relationship)), the DOC Personal Property Management Manual, the DOC Real

Property Management Manual, and any other applicable legal requirements.

19. Review, analyze, and comment on audit reports provided by the Grants Officer for review and

comment, the recipient’s response to audit reports, and audit determination appeals.

20. Ensure that FOIA requests for documents in Program Office files are reviewed and released or

withheld in accordance with the provisions of the FOIA.

21. Ensure compliance with all relevant programmatic statutes, regulations, EOs, and policies (e.g.,

civil rights and environmental issues). These factors should be considered at an early stage in the

application or proposal review process. This includes encouraging applicants to build environmental

considerations into their own planning processes in a way that facilitates National Environmental Policy

Act and other environmental compliance requirements. The funding agency, with appropriate

Department of Commerce oversight, is ultimately responsible for environmental compliance and has a

duty to enforce recipient compliance as a condition of funding.

22. Recommend to the Grants Officer suspension or termination of the award, when appropriate.

23. Provide one copy each to the Grants Officer and to the Budget Officer of any agreement

effecting a transfer of funds from other Federal agencies or from another DOC operating unit for

award(s) and identify to the Grants Officer any restrictions placed on funds that are transferred from

other Federal agencies for inclusion in a DOC grant or cooperative agreement.

[Note: A transfer of funds cannot be used to provide Federal assistance unless there is statutory

authority allowing the transfer. In addition, both the DOC operating unit and the other agency must

possess the requisite grant-making and mission-related authorities to carry out the work under the

award. See also Chapter 15 of this Manual.]

[Note: When DOC provides Federal funds to another Federal agency that is administering a

collaborative project with the Department, the agreement governing that transfer of funds must

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

20 April 2021

24. Arrange for an independent review to be conducted of institutional grant programs and/or

awards in accordance with Chapter 15 of this Manual.

25. Ensure that the program is in compliance with provisions of EO 12372 (Intergovernmental

Review of Federal Programs), and coordinate, as appropriate, with the Office of Legislative and

Intergovernmental Affairs (OLIA) to determine if the program is covered by EO 12372.

I. Property Management Office

1. Ensure uniform implementation of operating unit policies and procedures pertaining to the

administration of property purchased under an award by a non-Federal entity or furnished by the

Federal Government under an award. This includes communicating to non-Federal entities the property

trust relationship that exists when real property, equipment, supplies or intangible property is acquired

or improved under an award and the operating unit’s requirements regarding the recording of liens or

other appropriate notices of record to indicate that real or personal property has been acquired or

improved with a Federal award and that use and disposition conditions apply to the property. See 2 CFR

§ 200.316 (Property trust relationship).

2. If requested by the Grants Officer, provide guidance to recipients regarding establishing and

maintaining property accountability systems and the use and control of property acquired under the

provisions of an award.

3. If requested by the Grants Officer, establish and maintain property accountability records,

provide property disposition instructions to recipients, and provide a copy of the instructions to the

Grants Officer.

4. Provide support and assistance to the Grants and Program Officers, as needed, regarding any

and all property matters, including real property funded or partially funded with Federal funds through a

financial assistance award.

20 April 2021

5. RELATIONSHIPS WITH OUTSIDE ENTITIES

A. Overview

1. The DOC has a diverse mission that is accomplished via both in-house activities and through

non-Federal organizations, using instruments reflecting either a financial assistance, procurement, or

other type of agreement. These instruments are different in purpose and create different relationships

between the Department and outside parties.

2. The Federal Grant and Cooperative Agreement Act of 1977, as amended, 31 U.S.C. §§ 6301-

6308, (the Act) requires executive agencies to distinguish procurement relationships from assistance

relationships with non-Federal parties and provides some general guidance on helping make these

distinctions. The Act requires the use of procurement contracts for all agency acquisition activity, and

the use of assistance instruments (grants and cooperative agreements) for specified types of assistance

relationships.

3. This chapter summarizes and augments the guidance in the Act on distinguishing between those

situations in which a procurement contract, an assistance instrument (grant or cooperative

agreements), or other type of agreement is the appropriate instrument.

B. Grants

A grant is the legal instrument reflecting a relationship between DOC and a recipient whenever: (a)

the principal purpose of the relationship is to transfer anything of value in order to accomplish a public

purpose of support or stimulation authorized by Federal statute, and (b) no substantial involvement is

anticipated between DOC and the recipient during the performance of the contemplated activity. The

term "grant," as used in this manual, refers to both a grant(s) and cooperative agreement(s), unless

specifically stated otherwise. See 31 U.S.C. §§ 6304 and 6101(3) and 2 CFR § 200.1 (Definitions – Grant

agreement).

C. Cooperative Agreements

A cooperative agreement is the legal instrument reflecting a relationship between DOC and a

recipient whenever: (1) the principal purpose of the relationship is to transfer anything of value to

accomplish a public purpose of support or stimulation authorized by Federal statute, and (2) substantial

involvement (e.g., collaboration, participation, or intervention by DOC in the management of the

project) is anticipated between DOC and the recipient during performance of the contemplated activity.

See 31 U.S.C. § 6305 and 2 CFR § 200.1 (Definitions – Cooperative agreement). Cooperative agreements

are subject to the same laws; regulations; and OMB, Treasury, and other Federal directives as grants.

The following information may be helpful in deciding whether there is substantial involvement in the

scope of work of a proposed award.

1. Sections C. and G. of the OMB Guidelines, Implementation of Federal Grant and Cooperative

Agreement Act of 1977 (43 FR 36860 issued August 18, 1978), describe the characteristics of the factors

each Grants Officer should consider in deciding whether there will be substantial involvement of the

organization unit in the performance of activities under the assistance instrument.

2. Listed below are examples of involvement which may be substantial, depending upon the

circumstances, and examples of situations which would not be considered substantial. The examples

20 April 2021

are not meant to be a checklist nor does the presence of a single factor necessarily constitute

substantial involvement. Rather, they illustrate concepts that, in varying degrees or combinations, could

suggest the use of either a grant or a cooperative agreement. For more detailed examples, see the OMB

guidelines.

a. The following are examples of requirements that would demonstrate substantial

involvement if they were included in the terms and conditions of a financial assistance award:

(1) Authority to halt immediately an activity if detailed performance specifications (e.g.,

construction specifications) are not met.

(2) Stipulation that the recipient must meet or adhere to specific procedural requirements

before subsequent stages of a project may continue.

(3) Approval by an appropriate DOC official of substantive provisions of proposed subawards.

(4) Notification of changes to key recipient personnel.

(5) Requirement that the appropriate DOC official (1) collaborate with the recipient by working

jointly with a recipient scientist or technician, in carrying out the scope of work, (2) train recipient

personnel, or (3) detail Federal personnel to work on the project effort.

(6) Specify direction or redirection of the scope of work due to inter-relationships with other

projects, such as requiring recipients to achieve a specific level of cooperation with other projects.

(7) DOC operational involvement during the project to ensure compliance with such statutory

requirements as civil rights and environmental protection.

(8) Limitation on recipient discretion with respect to scope of work, organizational structure,

staffing, mode of operations and other management processes, coupled with close monitoring of

operational involvement during performance.

b. The following are examples of circumstances that would demonstrate non-substantial

involvement:

(1) Award follows normal procedures as set forth in 2 CFR Part 200 concerning Federal review

of recipient’s procurement standards and sole source procurements.

(2) The DOC program and grants administration offices become involved in the project solely to

correct deficiencies in project or financial performance.

(3) DOC performs a pre-award survey and requires corrective action to enable the recipient to

account for Federal funds.

20 April 2021

D. Procurement Contracts

A legal instrument reflecting a relationship between DOC and a business, organization or individual

whenever: (a) the principal purpose of the relationship is the acquisition, by purchase, lease, or barter,

of property or services for the direct benefit or use of the Federal Government, or (b) it is determined in

a specific instance that it is appropriate to use a type of procurement contract. Such a contract is

governed by the Federal Acquisition Regulation. See 31 U.S.C. § 6303.

E. Other Types of Agreements

There are transactions and agreements other than grants, cooperative agreements, and

procurement contracts under which DOC can enter into a relationship with outside entities. The Grants

Officer, OGC (FALD, Contract Law, and GLD), and OAM can offer advice and assistance with respect to

the appropriate instrument to be used in a specific set of circumstances. Some of these agreements are

referred to as Memoranda of Understanding (MOUs). Programs should not engage in MOU discussions

or enter into MOUs if financial assistance is anticipated for an activity or program; instead, in most cases

a competition should be planned. The MOU format is not appropriate as a substitute for procurement

contracts or financial assistance awards and is not to be used as a sole source or noncompetitive

justification for awarding procurement contracts or financial assistance. The cognizant Grants Officer

and OGC (FALD and GLD), and OAM should be contacted in situations involving an agreement pursuant

to the Economy Act (31 U.S.C. § 1535) or other funds transfer authority that results in the award of

financial assistance. In addition, questions about specific types of agreements may be referred to the

contact offices listed. Additional guidance on other types of agreements may be found in the

“Department of Commerce Interim Interagency and other Special Agreements Handbook” (April 2004).

Examples of other types of agreements include, but are not limited to, the following:

1. Cooperative Research and Development Agreement (CRADA). The Technology Transfer Act of

1986, as amended (15 U.S.C. § 3710a) authorizes legal instruments that provide for cooperative

research, licensing of patents obtained under a CRADA, and the transfer of technology from DOC to

another party or from another party to DOC. However, CRADA does not authorize the contribution of

financial assistance funding to a non-Federal party. An operating unit’s Technology Transfer Office or

the Office of the Chief Counsel for NIST should be consulted to determine if a CRADA is the appropriate

instrument in a given situation.

2. Economy Act Agreement. The Economy Act, 31 U.S.C. § 1535, authorizes agencies to place

orders with other Federal agencies for goods or services and to pay the actual or estimated costs of the

goods or services, when certain conditions are met. The OGC’s GLD provides legal advice on agreements

pursuant to the Economy Act. For Economy Act transactions that may involve the transfer of funds for

the subsequent award of financial assistance funds, the cognizant Grants Officer and OGC (FALD and

GLD) should be contacted prior to approval of the agreement.

[Note: There are instances when DOC operating units receive and/or transfer funds under an

Economy Act transaction from or to other Federal agencies to make awards of financial assistance.

Agencies may also have specific statutory authority to receive or transfer funds for particular programs.

In those circumstances, both the DOC operating unit and the other agency must possess the requisite

grant-making and mission-related authorities to carry out the work under the award. In addition,

established financial assistance procedures must be followed in making any award. An MOU may also

be used to memorialize a relationship where there is no direct exchange of funds between the parties.

20 April 2021

Activities under the MOU, however, may be carried out through the award of financial assistance when

established procedures (including competition) for financial assistance awards are followed.]

[Note: When DOC provides Federal funds to another Federal agency that is administering a

collaborative project with the Department, the agreement governing that transfer of funds must

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

3. Joint Project Agreement. DOC’s Joint Project Authority is set forth in 15 U.S.C. § 1525 in the

second paragraph. This authority permits DOC to engage on an equitable basis and under certain

conditions in joint projects on matters of mutual interest with non-profit, research, or public

organizations such as state and local governments. OGC’s GLD must be consulted for advice and

clearance concerning joint project agreements.

4. Fellowship. Fellowships in the federal assistance context are made to pursue studies, research,

and/or professional development (often of an academic nature) authorized by statute. Fellowship

programs are most often conducted under DOC grants or cooperative agreements made to institutions

of higher education or non-profit organizations. Fellowships made directly to students are not always

made under grants or cooperative agreements in DOC. The Grants Officer should be contacted with

respect to fellowship programs that are funded with grants and cooperative agreements.

20 April 2021

6. TYPES OF FINANCIAL ASSISTANCE FUNDS AND AWARDS

Federal funding for grants and cooperative agreements may be classified on the basis of the amount

of discretion that DOC has in making funding decisions. The two broad classifications for types of funds

are “discretionary funds” and “nondiscretionary funds."

A. Discretionary Funds

Discretionary funds are those funds for which DOC can exercise its judgment in selecting to whom

the funds are awarded. It is the policy of DOC that discretionary funds are provided only after maximum

practicable competition among eligible entities. However, there are instances where awards are

recommended for funding without full and open competition. The three types of awards made with

discretionary funds are discussed below.

1. Competitive Awards. These awards are made after a NOFO has been posted at Grants.gov and

DOC has chosen a proposal based on merit review, including the application of established evaluation

and selection criteria. The DOC may also treat as competitive an award that was solicited and reviewed

through another federal agency’s competitive process or through a competitive solicitation process

developed by several federal agencies acting in partnership. See Chapter 17 of this Manual for

instructions in preparing Federal Register notices, as required, and NOFOs announcing the availability of

financial assistance funds. Program officials are encouraged to further publicize notices through

Internet announcements, mailing lists, presentations at conferences, professional journals, trade

association newsletters, and other media that are available and accessible to potential applicants.

2. Institutional Awards.

a. These awards are made with the intent to maintain a long-term partnership between DOC

and the recipient for those projects established under long term planning goals and objectives

common to the research and programmatic needs of both parties.

(1) Renewal amendments may be made on a noncompetitive basis if the recipient performs

satisfactorily. While this type of award is intended to accommodate a long-term relationship

between DOC and recipients, the individual awards should not exceed a five-year period.

(2) The initial request for applications shall be the same as that for competitive awards and

should mention the intent to establish institutional award status.

(3) If a recipient of an institutional award is not complying with the terms and conditions of the

award, that recipient should generally be replaced by an applicant that is selected through full and

open competition.

(4) Programs that make institutional awards must conduct periodic reviews in accordance with

the provisions of Chapter 15 of this Manual.

b. The Grants Officer is responsible for determining whether a program is designated as an

institutional award program and may determine that only one or more awards under a program are

institutional awards. Institutional awards should only be established between an operating unit and

a recipient for long-term projects that are common to the programmatic goals and objectives of

DOC and the recipient.

20 April 2021

c. Institutional awards are not the same as multiyear awards, although they may be

incrementally funded within an award period. Other projects of long-term duration may be funded

using DOC Multi-Year Funding procedures prescribed in Chapter 18 of this Manual.

3. Noncompetitive Awards.

a. These awards are made without the benefit of competition. In those instances, when

noncompetitive awards are recommended for funding, complete and detailed justifications must be

submitted by the Program Officer, in the form of a “Noncompetitive Justification” memorandum, to

the Grants Officer for review and approval. Noncompetitive awards using discretionary funds for a

new award are allowed in only the following situations:

(1) Future awards under institutional grant programs where the recipient should have been

initially selected based on competition. The Program Office must provide to the Grants Officer

summary information about the original competition, or waiver of competition, and the date and

results of the latest periodic review.

(2) In instances where the application does not fall within the scope of a published competitive

notice and the agency determines in accordance with Chapter 8 of this Manual, that the application

has merit and falls within one of the five listed categories.

b. Unless otherwise covered by a Broad Agency Announcement (BAA), if more than five

percent (5%) of the total number of awards made under a program within one fiscal year are made

on the basis of recipient initiative, the Program Officer should examine the current Federal Register

notice and NOFO, if they exist, and make any corrections deemed necessary to future notices so that

the solicitation better reflects the goals or needs of the program.

B. Nondiscretionary Funds

Nondiscretionary funds are those funds for which DOC cannot exercise judgment in selecting an

award recipient. The two types of awards made with nondiscretionary funds are:

1. Awards Mandated by Statute. These mandatory awards are made to organizations that are

specifically named (not just generally described as to type of organization) in a statute and for which

funds may be set aside in an appropriations act. The recipient is entitled to the award and has an

enforceable right to receive financial assistance.

2. Awards Limited by Statute. These awards are made to organizations for which eligibility has

been limited by law to a particular class of applicants, every one of which has been notified of the

availability of funding, and every applicant that applies and that meets statutory requirements is assured

an award (e.g., there may be special language in an appropriations act directing an agency to make

awards to every state that applies for funding and meets certain criteria). Depending upon the program

and its legislation, there may be competition among the eligible applicants for additional funding as an

incentive for receiving proposals for innovative or pilot/demonstration projects.

[Note: Some programs in DOC are authorized to make awards with both discretionary and

nondiscretionary funds under different sections of their authorizing statutes.]

20 April 2021

7. TYPES OF APPLICATIONS

Applications for DOC grants and cooperative agreements may be classified into four major

categories, which are discussed below. Review, selection, approval, and notification procedures for all

applications shall be as prescribed in Chapter 8 of this Manual.

A. Pre-applications

Program Offices may request pre-applications for one or more of the following reasons: to establish

productive communications between the Program Office and applicants; to determine an applicant's

eligibility; and/or to provide an applicant feedback on how well a proposed project is likely to compete

with other similar projects. One of the advantages of pre-applications is to assist potential applicants by

giving them realistic feedback on whether their project ideas/proposals align with the goals and

objectives of a particular program and therefore may be considered competitive for Federal funding and

to discourage applications that have little or no chance of funding. Such pre-application review is

intended to allow applicants to avoid incurring significant expenditures in preparing applications that

are not consistent with the operating unit's program goals and objectives. This pre-application is

sometimes referred to as a letter of intent.

1. Pre-application Assessment. Under this type of pre-application process, regardless of any

feedback that a potential applicant may receive in response to a pre-application, the applicant still has a

right to submit a complete new application under the program. Pre-applications are usually reviewed by

program staff who may obtain assistance from other reviewers as deemed necessary. The review is

intended to form the basis for providing feedback or allowable technical assistance to applicants and is

not a process to provide assistance in the development of an application.

2. Pre-application Competition. A second type of pre-application process is one in which reviewed

projects are eliminated from further consideration, based upon explicit criteria expressly set forth in the

NOFO.

B. Competitive Applications

Competitive applications are those that have been received as a result of the appropriate

solicitation of proposals and that will be reviewed based on published evaluation and selection criteria.

These applications may be for new awards or for amendments.

1. New Competitive Awards.

a. Competitive applications are submitted pursuant to a competitive NOFO published by a DOC

operating unit at Grants.gov, as required in section A of Chapter 17 of this Manual. Widespread

publicizing is strongly encouraged and is recommended (e.g., Internet, mailing lists, conferences,

professional journals, and trade association newsletters).

b. All applications must be treated fairly and equitably under the review process.

2. Competitive Renewal Amendment. Competitive renewal amendments are treated the same as

a new competitive award. This type of application may be accepted unless prohibited by the program’s

legislation, regulations, or other published policy. Applications for competitive renewal amendments

funding must compete for funding with applications submitted by other eligible applicants and must be

20 April 2021

submitted in accordance with any established deadline dates and will be subjected to the applicable

review requirements for competitive awards. If the application is approved for funding, the Grants

Officer shall fund the extended period of support as a new budget period and an extension of the

original period of performance. Competitive renewal amendments are only appropriate in cases where

the program’s priorities do not vary from year to year, thus allowing a recipient to perform the identical

work (for which it was funded in prior years) in the current competitive funding year.

C. Noncompetitive Applications

Noncompetitive applications are those that have been received without benefit of full and open

competition. Unsolicited noncompetitive applications for new awards of discretionary funds that fall

within the scope of a competitive announcement will not be funded outside the competitive process

and should be held for the next competition or promptly returned to the applicant with appropriate

explanation. Noncompetitive applications may be used for new awards or for amendments.

1. New Noncompetitive Awards. Noncompetitive applications for discretionary funds are to be

approved only in unusual and extraordinary circumstances and only after the Program Officer and the

Grants Officer determine: (a) that a noncompetitive award of discretionary funds is warranted by the

facts; (b) that the application is consistent with DOC missions and plans; (c) and that the official grant file

contains appropriate justification documentation as required in Chapter 8 of this Manual.

2. New Awards Mandated or Limited by Statute. These applications may be submitted and

approved for funding when they are for statutorily authorized awards or for statutorily limited awards.

These awards are required by Congress in a public law and are made with nondiscretionary funds.

3. Renewal Amendments. A renewal amendment extends the project and budget periods of an

award, while adding funds. Appropriate uses of this type of amendment include renewals of

nondiscretionary awards and renewals of awards that are funded annually based on a NOFO posted at

Grants.gov, which expressly indicates that awards would be selected for a period of more than one year

but funded and extended annually, contingent upon the availability of funds, satisfactory performance,

and at the discretion of DOC. (Program priorities do not change from year to year.) Noncompetitive

awards of discretionary funds should not normally be given a renewal amendment without competition.

If an application to renew an existing award is approved for funding, the Grants Officer shall fund the

extended period of support as a new budget period and an extension of the original period of

performance. Note that “renewal amendment” and “continuation” are not Federal-wide terms and

other Federal agencies may use contrasting definitions.

4. Amendments for Continuations (Multi-year Awards). A continuation amendment is made

without competition and provides continued funding within an approved period of performance, such as

when multi-year funding was approved at the time of award approval. Chapter 18 of this Manual

provides procedures for funding multi-year awards when full funding of the period performance is not

available at the time of initial award. Note that “renewal amendment” and “continuation” are not

Federal-wide terms and other Federal agencies may use contrasting definitions.

5. Extension Amendments at No Additional Cost to the Government (No-cost Extensions). Unless

restricted by statute, regulations, or the terms and conditions of an award, a recipient may notify the

Grants Officer of its decision to use a one-time noncompetitive extension of the final budget period for

20 April 2021

up to 12 months beyond the ending date of the budget period as shown on the Financial Assistance

Award notice. This one-time extension may not be exercised merely for the purpose of using

unobligated balances. Such extension is made without additional funding. In certain circumstances,

prior Federal approval is required. See 2 CFR § 200.308 (Revision of budget and program plans). Any

further no-cost extension requires Grants Officer approval.

D. Supplemental Applications

Supplemental applications are for funding over and above the approved budget during the current

budget period with no change to the period of performance or the budget period. These applications

should be submitted and approved prior to the expiration date of the award. Funding for these types of

amendments is at the sole discretion of the operating unit with final approval of the Grants Officer. In

addition, supplemental funding is subject to funding constraints or limitations of the operating unit.

Supplemental applications should fully explain why it is necessary to provide additional Federal funding

to supplement the last approved budget. Appropriate handling of the competitive nature of

supplemental funding should be considered on a case-by-case basis. Supplemental applications may

only be for amendments that clearly are consistent with the approved scope of work and shall not be

funded merely to avoid competition.

1. Amendments for Administrative Increases to Meet Institution-wide Increased Costs.

Applications for supplemental funding may be submitted to an operating unit to cover organization-

wide increased costs, such as those costs associated with salary or fringe benefit increases that were not

foreseen at the time of the original application. The anticipated cost increases must take effect during

the current budget period to be eligible for supplemental funding. These applications are generally not

competed when the increased costs are within 25 percent of the last approved budget. If the increased

costs are more than 25 percent, the application should be treated in the same manner as an application

for new competitive awards, as described in this chapter. If this type of amendment is recommended by

the Program Officer and approved by the Grants Officer without competition, the official award file

must contain appropriate justification documentation to explain and justify the decision not to require

competition.

2. Amendments for Expansion of a Project or Cost Overrun. Applications for supplemental

expansion of a current project’s previously approved scope of work or to absorb a cost overrun are

generally treated in the same manner as an application for new competitive awards as described in this

chapter. If this type of amendment is recommended by the Program Officer and approved by the Grants

Officer without competition, the official award file must contain appropriate justification documentation

to explain and justify the decision not to require competition.

20 April 2021

8. MERIT REVIEW, SELECTION, APPROVAL, AND NOTIFICATION PROCEDURES

A. Overview

It is the policy of DOC to seek full and open competition for award of discretionary funds. Operating

units must conduct application reviews in accordance with the requirements stipulated in 2 CFR Part

200. Moreover, DOC financial assistance must be awarded through a merit-based review and selection

process whenever possible. This Chapter prescribes the standards and procedures for reviewing,

selecting, approving, and notifying applicants of funding decisions.

B. Review Standards

1. Applications. All applications for financial assistance should receive a fair, equitable, and

objective review.

a. The following are minimum general requirements that must be met in order for any

application to be processed for funding under DOC financial assistance programs:

(1) Legislative authority to perform the work with financial assistance;

(2) Funding availability;

(3) Complete application package; and

(4) Scope of work that is consistent with DOC’s mission.

b. Applications should undergo an initial screening for conformance with the minimum general

requirements and any mandatory technical and administrative requirements stated in the program’s

regulations and NOFO. The Program Office must document and maintain a record of reason(s) if any

application is determined to be incomplete. The agency, in its sole discretion, may continue the

review process for applications with non-substantive issues that may be easily rectified or cured.

c. Applications that meet the requirements of the initial screening are then subject to the

objective merit review as provided in B.4., below.

2. Nondiscretionary Funds. All awards made with nondiscretionary funds shall be subject to an

objective merit review by at least one reviewer who is professionally and technically qualified to

conduct the review. This review is limited to technical and/or cost matters.

3. Discretionary Funds. Except as provided below, all awards made with discretionary funds shall

be subject to an objective merit review by a group of at least three professionally and technically

qualified reviewers. This review is limited to technical and/or cost matters and is separate from any

programmatic review of program and policy factors, which may be considered in making a selection or

non-selection decision.

20 April 2021

4. Merit Reviews of Competitive and Noncompetitive Awards.

a. Merit Review of Competitive Awards:

(1) An objective merit review of financial assistance applications is advisory and does not

replace the authority of the program official responsible for deciding whether to recommend

funding for an award.

(2) The merit review criteria for new competitive awards and competitive amendments for

renewal must be in accordance with evaluation criteria set forth in the applicable program

regulations and NOFO. The merit review procedures must set forth the relationship between the

reviewing individuals, or the review committees or groups, and the official who has the final

decision-making authority. In defining this relationship, the program must set out, at a minimum,

the decision-making and documentation processes to be followed by the Selecting Official. This

should cover the procedures to be used when an adverse recommendation has been received

through the objective merit review process or when selection may be made out of rank order or

when selection for funding differs from the recommendations resulting from the merit review

process. Published selection factors, including a program’s funding priorities, may affect final

selection for funding.

b. Merit Review for Noncompetitive Awards:

(1) The merit review for new noncompetitive awards shall consist of an objective merit review

by a group of at least three professionally and technically qualified reviewers.

(2) Amendments for noncompetitive renewals and continuations of noncompetitive awards are

not subject to a merit review by at least three qualified reviewers if there has been no substantial

change in the scope of work of the original project.

5. Reviewers of Applications.

a. The DOC program office shall select reviewers on the basis of their professional

qualifications and expertise. Reviewers of any particular application may be any mixture of Federal

or non-Federal experts, sometimes including individuals from within the cognizant program office.

b. The Selecting Official should not be involved in the review of applications for the purpose of

determining whether to recommend the application for approval. If it becomes necessary for a

Selecting Official to review applications for this purpose, the program office must obtain a conflict-

of-interest review by FALD and the official grant file must contain documentation demonstrating

that there is no conflict of interest or that any conflict is resolved. In addition, a review panel should

have at least one member who is outside the chain of command of the Selecting Official whenever

possible.

c. Reviewers must evaluate and, in some cases, score the technical merits of applications and

accompanying proposals.

20 April 2021

d. Reviewers must comply with the requirements for the avoidance of conflict of interest

discussed at Chapter 15, Section C., of this Manual. In addition, each reviewer must use the

application information only for review and to treat it in confidence except to the extent that the

information is available to the general public from any source without restriction as to its use.

Further, each reviewer must agree to comply with any notice or restriction placed on the

application. Upon completion of the review, the reviewer shall return to DOC or destroy all copies

of the application and accompanying proposals (or abstracts, if any). Unless authorized by DOC, the

reviewer shall not contact the applicant concerning any aspect of the application. Non-Federal

reviewers must complete the Reviewer Conflict of Interest and Confidentiality Certification for Peer

Reviewers certification. If an equivalent certification is used, FALD should review it for completeness

before it is used.

e. When using experts from the private sector to review grant proposals, program officials

must assess whether the Paperwork Reduction Act (PRA)

, 44 U.S.C. § 3501 et seq., applies to the

recruitment. The PRA likely applies if potential reviewers are asked to supply information other

than a standard resume. Contact the appropriate information collection office for a determination

on whether the PRA applies.

6. Review Groups/Panels. A review group may take the form of the following:

a. Field Readers/Mail Review. An objective merit review of applications may be obtained by

using field readers to whom applications are sent for review and comment. Field readers may also

be used as an adjunct to financial assistance application review committees when, for example, the

type of expertise needed or the volume of financial assistance applications to be reviewed requires

such auxiliary capacity.

b. Panels/Ad Hoc Committees. A panel or ad hoc review committee can be used to obtain

consensus advice or independent recommendations on the technical merits of applications. Panels

including more than one non-Federal member should not use consensus scoring unless they comply

with the requirements of the Federal Advisory Committee Act

(FACA), 5 U.S.C. App. 1.

c. Federal Advisory Committees. Any advisory group, with limited exceptions, that is

established or used by a Federal agency and that has at least one member who is not a Federal

employee, may implicate the Federal Advisory Committee Act. A program office should consult OGC

if it contemplates using a group that includes any non-Federal individuals, to review financial

assistance applications.

C. Evaluation and Selection Requirements for Competition

This Section contains procedures to be followed in conducting a full and open competition for

discretionary awards. The selection procedures fall into two categories. One category, Group

Competition, is that in which all applications are grouped together to compete with one another and are

ranked in order of the independent reviewers’ scores. The second category, Individual Qualification, is a

review where each single application (the letter of intent (LOI), pre-application, or full proposal) is

judged individually to determine its qualifications based on published criteria (e.g., the notice may

stipulate that the first complete applications received that meet the minimum published requirements

20 April 2021

will be approved until the available funds are exhausted). The minimum requirements for each

selection category are listed below.

[Note: The Program Office may also implement additional tiers of internal reviews between the

independent or technical review and the final selection stage. Additional internal reviews should be

described in the NOFO, along with the evaluation and selection criteria.]

1. Group Competition. The Program Office must prepare a rank ordering of the applications based

solely on independent reviewers’ evaluation and scoring of each complete application that meets the

notice requirements. The Selecting Official must use the reviewer evaluation and any other selection

criteria published in the solicitation as the standard for making recommendations to determine

successful applicants. See also 2 CFR § 200.306 (Cost sharing or matching). The Selecting Official must

prepare a package: (1) demonstrating that the selection process is in compliance with the procedures

published in the NOFO or in the program regulations, and (2) summarizing the results of the competitive

review, consisting of the following documentation:

a. Copy of authorizing legislation and appropriations act (only relevant pages);

b. Copy of the NOFO soliciting applications, and the Federal Register Notice (FRN), as

applicable;

c. Copy of any review instructions and checklists and other review documents provided to the

independent reviewers;

d. List of reviewers (which may be coded to protect the identity of the reviewers);

e. List by rank order of the results of the merit review of all LOIs or pre-applications (if the LOIs

and pre-applications were mandatory and a basis of precluding applicants from submitting full

proposals), including the review of the LOIs and pre-applications by the independent reviewers,

reviewers’ scores, and the ranked scores of each application;

f. List of all applications/proposals rejected and the reason(s) for rejection;

g. List by rank order of the results of the merit review of applications/proposals (including the

review of pre-proposals, if such a review will result in one or more applicants being prohibited from

submitting full proposals and thereby not being able to compete further for an award) by the

independent reviewers, to include reviewers’ scores and the ranked scores of each application;

h. Copies of completed reviewer’s score or evaluation sheets;

i. List of applications/proposals selected and recommended for funding by the selecting

official and the reason as allowed by the published criteria for selection, including justification for

funding application if out of rank order;

j. A copy of FALD comments, if any, and the Program Officer’s response; and

k. Identification of the Selecting Official.

20 April 2021

2. Individual Qualification. The Program Office must adequately document the selection process

based on the reviewer evaluations of each complete application that meets the notice requirements.

The selecting official will use the reviewer/panel evaluations and other selection criteria published in the

solicitation in making recommendations to determine the successful applicants. The Selecting Official

must prepare a package: (1) demonstrating that the selection process is in compliance with the

procedures published in the NOFO, the Federal Register notice, as applicable, or in the program

regulations, and (2) summarizing the results of the review consisting of the following documentation:

a. Copy of authorizing legislation and appropriations act (only relevant pages);

b. Copy of the NOFO soliciting applications, and the Federal Register Notice (FRN), as

applicable;

c. Copy of any review instructions and checklists and/or other review documents provided to

the reviewers;

d. List of reviewers (may be coded to protect the identity of the reviewers);

e. Evaluation of the application and accompanying proposal and basis for selection;

f. A copy of FALD comments, if any, and the Program Officer’s response; and

g. Identification of the Selecting Official.

D. Review Process for Applications for Competitive Awards

1. Posting a NOFO on the OMB-designated governmentwide Web site or Publishing a Federal

governmentwide Web site, currently Grants.gov or via a Federal Register Notice, in accordance with

Chapter 17 of this Manual.

2. Program Office Review. Upon receipt of applications, Program Office staff will review

applications for completeness and ensure that all requirements of the NOFO, authorizing statute, and

Federal Register Notice, as applicable, have been met. The Program Office will arrange for all complete

applications to be reviewed by a group of three or more reviewers in accordance with Section B. of this

chapter. In coordination with the Grants Office, the Program Office may conduct negotiations with

applicants deemed meritorious by the review panel and determined by the Program Office to stand a

reasonable chance of being funded.

3. Grants Office Review. The Grants Office will conduct a final review of all applications

recommended for funding by the Selecting Official. The Grants Officer is the DOC official who makes the

final decision for the Government on whether to fund an application. The Grants Officer’s final decision

must be consistent with published policies.

4. OGC Review. The OGC will review grant applications and supporting documents for proposed

awards where Federal funding exceeds $250,000 (unless a waiver has been granted under the provisions

20 April 2021

of Chapter 4.C.3). The OGC will advise the Grants Officer on all matters related to law and the legal form

and effect of these proposed award actions. The OGC will be available to assist and respond to questions

about any individual financial assistance action.

E. Review Process for Applications for Institutional Awards

1. New Recipients. New recipients under institutional award programs must be selected after full

and open competition. The procedures in Section D. of this chapter should be followed in the initial

selection of a new recipient under a discretionary institutional program.

2. Future Awards. Once a recipient has been approved for funding under an institutional award,

the procedures used for applications for nondiscretionary funding in Section G. of this chapter will be

followed for future applications for subsequent new awards under the program if the incumbent

recipient is performing satisfactorily.

3. Periodic Reviews. Reviews of programs that make institutional awards must be conducted at

least once every five years to evaluate the effectiveness and continued desirability of the use of

institutional awards in accordance with Chapter 15 of this Manual. The results of these reviews must be

a consideration by both the Program Officer and the Grants Officer in making a determination to

continue providing funding without competition to each recipient of an institutional award.

F. Review Process for Applications for Noncompetitive Awards Made with

Discretionary Funds

The following procedures will be followed when the Program Office is considering a noncompetitive

application for discretionary funding:

1. Program Office Review.

a. The Program Office initiates the process of determining whether to fund a noncompetitive

award with discretionary funds by ascertaining whether the application meets the criteria listed

below. The Program Office will arrange for the application to be reviewed in accordance with the

review standards in this chapter. The purpose of this review is to provide advice to the Selecting

Official as to the technical soundness and merits of the application. If the application does not meet

the criteria for consideration as a noncompetitive award, the Program Office will return the

application to the applicant with an explanation as to why it cannot be considered.

b. If the application warrants review on a noncompetitive basis, an appropriate program

official must provide a Non-Competitive Justification Memorandum for the noncompetitive award

to the Grants Officer for approval. The justification for the noncompetitive award must include one

or more of the conditions listed below and must provide sufficient basis for the determination(s):

(1) Only One Source Identified. There may be instances where only one responsible applicant

can perform the work of the proposed award. The following are some of the circumstances in which

this may occur:

(a) The applicant organization has proprietary information necessary for the conduct of the

work. In the case of the applicant organization having proprietary information, the program officer

must describe what the proprietary information is that is offered by the applicant and why it is that

20 April 2021

no others could possibly possess the information. The program officer provides this noncompetitive

justification documentation. An applicant’s claim is not sufficient justification. The program officer

must state in writing that, based on his or her own expertise or the expertise of others he or she has

consulted, the applicant has proprietary information necessary for the conduct of the work.

(b) The applicant organization has made a substantial investment in the activity. In the case of

the applicant organization having made a substantial investment in the activity, the nature and

amount of that investment should be described. The applicant’s receipt of previous Federal awards

for the activity does not constitute substantial investment. The applicant’s own resources must be

involved.

approach. In the case of the applicant organization proposing a project with a unique idea, method,

or approach the nature of the idea, method, or approach and what makes it unique should be

described.

(d) The applicant organization is the only organization known to possess the capability to

perform the work. In the case of the applicant organization being the only one known to possess

the capability to perform the work, the program officer has to describe how that was determined.

The justification could be based on the specific situation involving the project (for example, the

recipient needs to be a university that awards doctoral degrees and the identified recipient is the

only one in the targeted geographic area which does that) or the program officer’s efforts to

determine if other organizations can do the work (for example, by contacting other potential

recipients to determine if they have the capability or interest in carrying out the proposed project).

(2) Unusual and Compelling Urgency. The work to be conducted is of such an unusual and

compelling urgency that the public interest would be seriously compromised unless the Program

Office is allowed to limit or suspend competition for the proposed award.

(3) International Agreement. Competition is precluded by the terms of an international

agreement or a treaty between the United States and a foreign government or international

organization.

(4) National Security. Full and open competition is not required when the Secretary of

Commerce determines in writing that public disclosure of the proposed support to be provided

under the award would compromise the national security.

(5) Public Interest. Competition is not required when the Head of the Operating Unit or

designee determines in writing that it is not in the public interest in a particular case to seek full and

open competition for an award. A rational basis must be set forth in the written determination. An

example of a situation that might support a public interest determination is the implementation of a

pilot project.

c. If the application is determined to be meritorious and appropriate for funding on a

noncompetitive basis, the Program Office, in conjunction with the Grants Office, will negotiate the

terms and conditions of the award and the level of funding.

20 April 2021

2. Grants Office Review. The Grants Office will conduct a final review of all proposed

noncompetitive applications recommended for funding by the selecting official. The Grants Officer is

the DOC official who makes the final decision for the government on the acceptability of the justification

for award without competition and whether to fund noncompetitive applications.

3. OGC Review. The OGC reviews all noncompetitive applications and supporting documentation

proposed for award to advise the Grants Officer as to legal form and effect, unless review has been

waived by the FALD Chief.

G. Review Process for Applications for Awards Mandated or Limited by Statute

1. Notice. Only eligible applicants must be notified of the availability of funds for nondiscretionary

awards. The notice must be in writing and it may take the form of a Federal Register notice, letter to all

eligible applicants, or other appropriate form(s) of written notice.

2. Program Office Review. The Program Office staff will conduct the initial screening of the

application(s) in accordance with Section B. of this Chapter, review the application(s) for accuracy and

completeness, and will conduct any necessary negotiations with the applicant(s). The Program Office

will arrange for the application(s) to be reviewed by at least one merit reviewer. The purpose of this

review is to provide advice to the selecting official as to the technical soundness and merits of the

application. If deficiencies are identified, the applicant will be contacted by the Program Office staff and

asked to revise the proposal and application accordingly.

3. Grants Office Review. In coordination with the Program Office, OGC, and other offices as

appropriate, the Grants Office will conduct a final review of all applications for nondiscretionary funds

that are recommended for funding by the appropriate program official. The Grants Officer is the DOC

official who approves the application for funding. The Grants Officer’s final decision must be consistent

with published policies.

4. OGC Review. The OGC will review all nondiscretionary applications and supporting documents

for proposed awards to advise the Grants Officer on all matters related to law and the legal form and

effect of the proposed award actions, unless review has been waived by the FALD Chief.

H. Congressional Notification

Once an award with Federal funding is ready to be approved, the Grants Office shall provide

information for the Congressional notification to the DOC Office of Legislative and Intergovernmental

Affairs (OLIA) using the respective Grants Office’s procedures as established with OLIA.

I. Obligation of Funds

The cognizant Grants Officer is the only official authorized to sign awards to obligate funds for the

Department for grants and cooperative agreements. The Grants Officer’s decision to obligate funds

must be an independent decision, made only after he/she is personally satisfied that it is appropriate to

make the award. The Grants Officer’s signature on the Form CD-450 (Financial Assistance Award) or on

the Form CD-451 (Amendment to Financial Assistance Award) constitutes an obligation of Federal

funding. Grants Officers must promptly notify Program and Accounting/Finance Offices when funds

have been obligated.

20 April 2021

J. Notice to Applicants

1. Successful Applicants. The Grants Officer will notify successful applicants in a written Award

Notice when they have been selected for an award. Prior to official Grants Officer notification, other

officials and employees from the operating unit are prohibited from either formally or informally

notifying applicants verbally or in writing that they will receive awards.

2. Unsuccessful Applicants.

a. The Program Officer shall determine the best method for notifying unsuccessful applicants.

These notifications must be in writing and can take place in either of the following ways:

(1) As soon as the Grants Officer has notified the successful applicants in writing that they have

been selected for an award, the Program Office will notify all unsuccessful applicants that they were

not selected for funding.

(2) The Program Office may notify applicants whose applications will not receive merit review

at the time of this decision. The Program Office may notify all unsuccessful applicants that their

applications are not being recommended for funding when the Selecting Official has decided which

applications to recommend to the Grants Officer for further action.

b. Applications, correspondence, and other records relating to unsuccessful (rejected,

withdrawn, or unfunded) applications may be destroyed three years after rejection or withdrawal.

Applications not meeting application deadlines or minimum review requirements may be returned

to the applicant. The policy concerning disposition of unsuccessful applications should be included

in the NOFO.

c. Unsuccessful applicants may request a debriefing, which will provide constructive feedback

that can assist applicants to develop improved proposals in the future. Briefings should take the

form of advice to applicants on the strengths and weaknesses of their own proposal in terms of the

published evaluation and review criteria; however, score sheets, redacted or otherwise, should

generally not be released to unsuccessful applicants and bureaus are encouraged to consult with

FALD.

20 April 2021

9. PRE-AWARD ADMINISTRATIVE REQUIREMENTS

A. Application Package

For discretionary competitive programs, each DOC Program Officer must prepare an application

package, which may be in electronic format. Application packages should include all of the information

that prospective applicants need to apply for an award under the program involved. The Program

Officer should consult the Grants Officer when preparing the application package. The application

package must be cleared by the Grants Officer and reviewed by FALD prior to issuance. Specific

application package contents may vary; however, application packages must include the following

minimum information:

1. Copy of the applicable NOFO prepared in accordance with Chapter 17 of this Manual.

2. Application Forms. Program Officers must use the following OMB-prescribed standard forms, as

applicable, and/or any other forms approved by DOC and OMB for inclusion in the application package.

Generally, in the case of paper applications, the applicant is required to submit one original and two

copies of these forms. Additional copies of these forms and unique or program-specific forms must be

approved by DOC and OMB in accordance with the requirements of 5 CFR Part 1320 (Controlling

Paperwork Burdens on the Public).

a. Standard Form 424 - Application for Federal Assistance

b. Standard Form 424A - Budget Information - Non-Construction Programs

c. Standard Form 424B - Assurances - Non-Construction Programs

d. Standard Form 424C - Budget Information - Construction Programs

e. Standard Form 424D - Assurances - Construction Programs

f. Standard Form 424 - Family of Forms for Research and Related Programs

g. Standard Form 424 - Short Organizational Family

h. Standard Form 424 - Individual Form Family

i. Standard Form 424 - Mandatory Family

j. Standard Form LLL - Disclosure of Lobbying Activities

k. Form CD-511 - Certification Regarding Lobbying

l. Form CD-512 - Certification Regarding Lobbying - Lower Tier Covered Transactions

20 April 2021

3. Information about Intergovernmental Review of Federal Programs in accordance with the

provisions of EO 12372, if the program is subject to this review. The following information should be

provided:

a. Reference to a current list of the State Point of Contacts (SPOCs), including their names,

addresses, and telephone numbers;

b. The address to which the SPOCs should send any State process recommendations; and

c. The specific due date for State process recommendations (formally 60 days after the

application deadline date), and a statement that the funding agency does not guarantee to

“accommodate or explain” for State process recommendations received after that date.

B. Recommendation for Funding

Once an application has been identified as one that will be recommended for funding, the Program

Office staff will ensure that complete application recommendation packages are prepared to be

forwarded to the Grants Officer. The following are minimum requirements for a complete application

recommendation package:

1. Application (Form 424 Series or SF-424 Family of forms, or other authorized forms) with original

or electronic dated signature, including complete proposal with any revisions; a detailed budget

narrative; a copy of the current approved negotiated indirect cost agreement (if budget includes indirect

costs and the applicant has a negotiated agreement), as applicable; and signed Forms CD-511, and SF-

LLL, as applicable.

2. Recommendation memorandum from the Selecting Official, indicating if the award is intended

to be a grant or a cooperative agreement. If the award is recommended to be a cooperative agreement,

the package must include a description of the funding agency’s substantial involvement. The Grants

Officer will make the final decision concerning the type of funding instrument.

3. Copy of the applicable NOFO or the justification for noncompetitive award as provided in

Chapter 8 of this Manual; the original documentation of the review panel’s evaluations; and the

Selecting Official’s basis for determination to recommend for funding based on program priorities if not

already provided in a summarized package in accordance with Chapter 8 of this Manual. When

institutional awards are providing additional funding without competition through either a new award

or an amendment, a summary including the date of the most recent report and brief description of the

results of the last program review conducted in accordance with provisions of Chapter 15 of this Manual

must be included.

4. The Budget Officer’s or other responsible official’s certification (e.g., Grants Management

Information System funding tab or Grants Online procurement request) of availability of funds.

5. Copy of all pertinent pre-award correspondence with the applicant.

20 April 2021

C. Budget Analysis

Prior to award of a grant, the Program Officer and Grants Officer must perform a thorough review

and evaluation of the applicant's proposed budget data, documentation of which will be maintained in

the official grant file. Costs charged to a financial assistance award must be allocable, allowable, and

reasonable.

1. When the budget data provided by the applicant does not provide the level of detail sufficient

for an informed analysis to be performed, the Grants Officer or Program Officer shall contact the

applicant for additional information or clarification. In the unusual circumstance that an award is

approved without proper and complete budget information, a specific award condition must be

included in the award requiring submission of needed information within a specified time period. The

official award file must contain a written justification for approving the award prior to receipt of budget

information.

2. The budget analysis must include the evaluation of cost data, including a determination that the

costs proposed are in accordance with applicable cost principles; the evaluation of specific elements of

costs; and projection of these data to determine the effect on such factors as:

a. The allowability and necessity for individual cost categories;

b. The reasonableness of amounts estimated for necessary costs;

c. The basis used for allocating indirect or overhead costs; and

d. The appropriateness of allocating particular overhead costs to the proposed project as

direct costs.

3. Projects may be funded in increments as described in Chapter 18, Multi-Year Funding

Procedures.

D. Costs

Eligible costs under a DOC financial assistance award must be in accordance with the applicable cost

principles (2 CFR Part 200, Subpart E).

[Note: If the Grants Officer applies 48 CFR Part 31 to an award to a for-profit entity, then 2 CFR Part 200

Subpart E would not apply.]

1. Cost Sharing or Matching Funds. Cash and in-kind contributions that are included in the budget

of the award must be valued in accordance with 2 CFR Part 200.

a. All awards that include Federal and non-Federal sharing incorporate a budget (using SF 424a

or SF 424c) consisting of shared allowable costs. If actual allowable costs are less than the total

approved budget, the Federal and non-Federal cost shares shall be calculated by applying the

approved Federal and non-Federal cost share ratios to actual allowable costs. If actual allowable

costs are greater than the total approved budget, the Federal share shall not exceed the total

Federal dollar amount authorized by the award.

20 April 2021

b. The non-Federal share, whether in cash or in-kind, is to be paid out at the same general rate

as the Federal share. Exceptions to this requirement may be granted by the Grants Officer based on

sufficient documentation demonstrating previously determined plans for, or later commitment of,

cash or in-kind contributions. In any case, the recipient must meet its cost share commitment over

the life of the award. The recipient must create and maintain sufficient records justifying all non-

federal sharing requirements to facilitate questions and audits.

c. Waiver for Insular Areas. In accordance with provisions of Public Law 95-134, Title V, § 501

(1977), as amended (48 U.S.C. 1469a), DOC has determined that any requirement for local matching

funds less than $200,000 (including in-kind contributions) to be provided by American Samoa,

Guam, the Virgin Islands, and the Northern Mariana Islands shall be waived, notwithstanding any

other provision of law. Any matching funds otherwise required by law to be provided by

government entities of an insular area may be waived at the discretion of the operating unit.

2. Direct Costs. Costs that are directly related and can be traced to the cost of the project being

supported and that are within approved budget categories may be charged to the award. For example,

if the budget provides costs only for Personnel, Fringe Benefits, Supplies, Equipment, and Travel, the

recipient is not allowed to charge to the award costs for Contracting or Consultants without the prior

written approval of the Grants Officer.

3. Federal Employee Expenses. Use of award funds (Federal or non-Federal) or the recipient’s

provision of in-kind goods or services for the purposes of transportation, travel, or any other expenses

for any Federal employee may raise appropriation augmentation issues. In addition, Department policy

may prohibit the acceptance of gifts, including travel payments for federal employees, from recipients or

applicants regardless of the source. Therefore, Program Officers and Grants Officers should contact the

FALD for guidance should a recipient propose to pay any expenses for any Federal employee.

4. Indirect Cost Rates. At 2 CFR 200.414(c), the Uniform Guidance requires Federal agencies to

accept federally negotiated indirect cost rates unless certain exceptions apply. See Financial Assistance

Memorandum 2015-02 (The Department of Commerce’s Policies, Procedures, and General Decision-

Making Criteria for Deviations from Negotiated Indirect Cost Rates under Federal Financial Assistance

Programs and Awards, July 20, 2015) for direction.

5. Pre-Award Costs. Eligible pre-award costs under a DOC financial assistance award must be in

accordance with 2 CFR §§ 200.458 (Pre-award costs) and 200.308 (Revision of budget and program

plans). It is DOC’s policy to waive the prior approval requirement for pre-award costs (up to 90 days) for

research awards. However, such costs incurred remain at the applicant’s risk. The Grants Officer should

approve in writing any pre-award costs of more than 90 days and should consult FALD if questions arise

about the availability of authority.

6. Profit or Fee. Fee or profit or other increment above cost may not be paid on Department of

Commerce financial assistance awards unless there is statutory authorization to do so. Requests for fee

or profit by recipients of any type should be referred to FALD for review. Conference fees to cover

allowable costs, such as meals (excluding entertainment and alcohol) or room space and materials, are

considered program income and not fees. Program income is allowable. Recipients should refer to the

guidance for program income in item 7 below.

20 April 2021

7. Program Income.

a. Recipients are required to account for program income related to projects financed in whole

or in part with Federal funds. Program income is gross income earned by the recipient that is

directly generated by a supported activity or earned as a result of the award. Program income

excludes interest earned on advances and includes, but is not limited to, income from service fees,

conference fees, sale of commodities, usage or rental fees, and royalties on patents and copyrights.

b. Proceeds from the sale of real and personal property purchased in whole or in part with

Federal funds is not program income and shall be handled in accordance with the property

management provisions set forth in the award.

c. Recipients have no obligation to the Federal Government with respect to program income

earned from license fees and royalties, copyrighted material, patents, patent applications,

trademarks, or inventions produced under the award, unless otherwise required by statute, agency

regulations, or the terms and conditions of the award. In particular, inventions made under an

experimental, developmental, or research award must comply with the requirements of 35 U.S.C.

Chapter 18 (Patent Rights in Inventions Made with Federal Assistance) and 37 CFR Part 401 (Rights

to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants,

Contracts, and Cooperative Agreements).

d. The disposition of program income shall be in accordance with the applicable Federal

administrative requirements and will be specified in the terms and conditions of each award. See 2

CFR § 200.307 (Program income).

E. Executive Order (E.O.) 12372 (Intergovernmental Review of Federal Programs)

In accordance with E.O. 12372, each operating unit shall provide the states the opportunity for

consultation on proposed Federal financial assistance and direct Federal development programs. The

E.O. was issued with the desire to foster intergovernmental partnership and strengthen federalism by

relying on State and local processes for the coordination and review of proposed Federal financial

assistance and direct Federal development. Under the E.O., state and local officials, not the Federal

Government, will determine what Federal programs and activities to review and the procedures for the

review.

F. Applicant’s Management and Financial Capabilities

DOC policy is to make awards to applicants and recipients who are competently managed,

responsible, capable, and committed to achieving the objectives of the awards they receive. It is

essential, therefore, that precautions be taken to award grants only to reliable and capable applicants

who can reasonably be expected to comply with award requirements. Therefore, operating units will

conduct a review of risk posed by applicants in accordance with 2 CFR § 200.206 (Federal awarding

agency review of risk posed by applicants).

20 April 2021

G. Review of Recipient’s Risk

1. The Grants Officer is charged with determining whether an applicant is sufficiently responsible

to receive Federal financial assistance in accordance with the requirements established in 2 CFR §§

200.206 (Federal awarding agency review of risk posed by applicants) and 200.208 (Specific conditions),

as applicable.

2. If sufficiently adverse factors about the applicant are discovered during the course of reviewing

an application, the Grants Officer may, depending on their nature and severity:

a. Not make the award;

b. Delay the award until conditions are corrected; or

c. Impose additional specific award conditions as needed, in accordance with 2 CFR § 200.208

(Specific conditions).

3. In any instance where a Grants Officer intends to deny, or a program office fails to recommend,

a grant or cooperative agreement to an applicant on the basis of pre-award concerns relating to the

applicant’s present responsibility, the applicant must be given notice of the Department’s

determination. In addition, per 2 CFR § 200.213 (Reporting a determination that a non-Federal entity is

not qualified for a Federal award), the Grants Officer must determine if a report must also be made to

the designated integrity and performance system accessible through SAM, currently the Federal

Awardee Performance and Integrity Information System, (FAPIIS). Such a determination relates solely to

the applicant’s present responsibility and the particular award for which the determination is being

made and does not affect the applicant’s eligibility for future awards. The notice to the applicant must

provide the applicant an opportunity to submit information showing that the Department’s

determination is in error or otherwise warrants reconsideration. Once an adverse determination has

been made, an award may be made to the next appropriate applicant. Whenever a determination is

made which will deny an award based on responsibility concerns, and the denial is part of a long-term

plan to disqualify the applicant, DOC’s formal debarment and suspension regulations (2 CFR Part 1326)

must be followed. These regulations provide procedures for excluding organizations from participating

in Federal procurement and nonprocurement activities on a government-wide basis. Failure to provide

the appropriate procedures may expose DOC to a valid claim of de facto debarment based on an

argument by the applicant that it has been denied due process of law. As a practical matter,

government-wide debarment and suspension under 2 CFR Part 1326 is used only in the most serious

cases, such as indictment for and/or conviction of criminal offenses.

4. The Grants Officer may take any of the steps identified below if adverse information on the

recipient, or any key individual associated with the recipient, reflects significantly and adversely on the

recipient’s honesty or financial integrity, and is discovered after an award is made:

a. Require the removal of personnel from association with the management of and/or

implementation of the project and require Grants Officer approval of personnel replacements; and

b. Impose additional specific award conditions as needed, in accordance with 2 CFR § 200.208

(Specific conditions); or

20 April 2021

c. Terminate or suspend the award until corrective action has been taken. Such action should

be taken only after the recipient has been afforded adequate due process as noted in section G.3. of

this chapter.

d. Require the recipient to make other changes as appropriate.

5. If any of the adverse factors set forth in this chapter are present, the Grants Officer shall

document the official grants file to indicate the circumstances, the nature of the action taken, and the

reason.

H. Awards to Insular Areas

Operating units are encouraged to consolidate financial assistance awards to insular areas when

project activities are similar. If awards are consolidated, operating units shall take the following actions:

1. Provide for a single set of written program and financial reports for each consolidated award,

instead of individual reports for each project activity which has been consolidated;

2. Receive centrally and distribute all requested reports to appropriate program offices;

3. Designate a primary contact with the recipient on all administrative matters related to the

consolidated award;

4. Maintain one official grant file on the consolidated award; and

5. Review cost sharing requirements in accordance with provisions of section D.1. of this chapter.

I. Preparation of Financial Assistance Award

1. Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform

Guidance). The Uniform Guidance, which is codified at 2 CFR Part 200, applies to most DOC awards,

regardless of the type of recipient. The Uniform Guidance consolidates and supersedes the

administrative requirements and cost principles that had formerly been codified at 15 CFR Parts 14 and

24 (applicable to institutions of higher education, hospitals, other non-profit, and commercial

organizations and state and local governments, respectively) and 2 CFR Parts 220, 225, and 230,

applicable to educational institutions; state, local, and Indian Tribal governments; and non-profit

organizations.

In accordance with 2 CFR 200.101(a)(2), the operating unit may apply Subparts A through E of 2 CFR

Part 200 to for-profit entities.

a. 48 CFR Part 31 (Contracts with Commercial Organizations) applies to for-profit organizations

and individuals.

20 April 2021

b. Appendix E to 45 CFR Part 74 (Principles for Determining Costs Applicable to Research and

Development under Grants and Contracts with Hospitals) applies to hospitals other than those that

are non-profit.

[Note: If the Grants Officer applies 48 CFR Part 31 to an award to a for-profit entity, then 2 CFR Part 200

Subpart E would not apply.]

2. Award Document. The Form CD-450 (Financial Assistance Award) or Form CD-451 (Amendment

to Financial Assistance Award) shall be used as the award documents for all grants or cooperative

agreements funded by DOC and must comply with 2 CFR § 200.211 (Information contained in a Federal

award). In addition to the information required for a Federal award, the following must be included.

a. Period of Performance.

(1) The award must include a start date and end date. Periods of performance should not

ordinarily exceed five (5) years.

(2) In order to avoid delays that could possibly jeopardize the success of a project or possibly

result in the recipient putting itself at risk by incurring costs without having a properly executed

award document, applications should be requested and processed in a timely manner.

(3) Procedures for funding proposals that include a project description and budget

incorporating more than one year of activity when only a portion of the entire amount of Federal

funding is available are found in Chapter 18 of this Manual.

b. Budget. A budget must be included in every award. It shall be used as the established

standard for financial monitoring purposes. Changes made to the budget once the award is issued

must be made in accordance with the DOC Standard Terms and Conditions, applicable regulations,

and OMB Circulars. Each budget contains a detailed listing of categories of costs which are

allowable under the award. Only those categories of costs which have funding included in the

approved budget are considered allowable costs under a grant or cooperative agreement. The

recipient cannot add a new budget category to an approved budget without prior written approval

from the Grants Officer.

c. Specific Award Conditions. In addition to the laws, regulations, 2 CFR Part 200, DOC

Standard Terms and Conditions, and Program-Specific Terms and Conditions controlling the

administration of a grant, specific award conditions may also be imposed when justified by

circumstances. Specific award conditions imposed after the award has been made must be agreed

to by both the recipient and the Federal Government unless Federal law or regulation provides the

Federal Government with the right to impose specific award conditions under the grant in

accordance with 2 CFR §§ 200.206 (Federal awarding agency review of risk posed by applicants) and

200.208 (Specific conditions). Department-wide or program specific award conditions should be

used, as applicable, in all DOC grants and cooperative agreements. Other specific award conditions

may include the following:

(1) When a cooperative agreement is selected as the funding instrument, the award must

include, at a minimum, those items described in subparagraphs a. through c. below. When not

20 April 2021

clearly and specifically provided for in the application, proposal, or other statement of work that is

incorporated in the award, specific award conditions shall be included that provide:

a. A project management plan identifying the respective role, responsibility, obligation, and

accountability of each project participant;

b. A statement of how project performance will be measured; and

c. A statement delineating the expected level of substantial Federal involvement.

(2) In the event the evaluation of risk of the recipient warrants specific award conditions, the

Grants Officer will comply with 2 CFR §§ 200.206 (Federal awarding agency review of risk posed by

applicants) and 200.208 (Specific conditions), as applicable.

(3) Where OMB guidance or DOC regulations and policy permit, the Grants Officer may use

specific award conditions to waive certain administrative requirements, including requirements in

the DOC ST&Cs. When waiving these prior approval requirements, the Grants Officer may elect to

require that the recipient provide notification after a specific action has been taken.

d. Standard Terms and Conditions.

(1) The Department of Commerce Financial Assistance Standard Terms and Conditions must be

incorporated into each award, except EDA construction awards and revolving loan fund (RLF)

awards.

(2) EDA includes separate standard terms and conditions in its construction-related awards and

revolving loan fund (RLF) awards, respectively, which derive from the DOC Standard Terms and

Conditions in consultation with, and after timely consideration and comment from, OAM and FALD.

20 April 2021

10. POST AWARD ADMINISTRATION REQUIREMENTS

A. Official Award File

There shall be a single official award file for each award – which may be paper, electronic, or a

combination of the two. The Grants Officer shall be the custodian of the official award file, responsible

for maintaining a complete and accurate official award file and shall determine where the file is

maintained. The file shall be DOC’s official record of all administrative, financial, and programmatic

activities which occurred under the award. The official award file shall be used for managing the award,

resolving disputes, litigation, audits, reporting to Congress, answering FOIA requests, and for all other

official purposes. Grants Office and Program Office personnel shall ensure that all pertinent

correspondence, notes, reports, amendments, and other relevant information are included in the official

award file. Wherever the Manual requires written documentation, electronic forms of the

documentation are included, so long as it is clear where the electronic information is located and that it

can be retrieved as necessary. At a minimum, and as applicable, the official award file must include or

have available for easy access the following:

1. The original signed application forms, as applicable (SF-424 form family, or OMB approved

alternative to these forms). In addition, the official file must include required DOC forms including, but

not limited to, the CD-511 and SF-LLL, when applicable.

2. The original applicant proposal, budget, budget justification, and any amendments to these

documents. In addition, the NOFO as it appeared on grants.gov.

3. Documentation of the analysis upon which the award selection was based including evaluations,

scores, justifications, etc. This documentation must clearly demonstrate that the selection procedures

have met the requirements contained in Chapter 8 of this Manual.

4. Internal review and clearance documents including all required signatures from the budget

office, legal counsel, OIG, grants office, and any other pertinent reviews and/or concurrences

determined to be necessary by the Grants Officer or required by DOC or operating unit policy.

5. Certification that all required and applicable pre-award administrative procedures were

completed. These procedures include but are not limited to the following:

a. Assurance that the recipient was competitively selected by an independent review process

or that appropriate noncompetitive review procedures were followed in accordance with Chapter 8

of this Manual and that the official award file contains the required documentation with respect to

review and selection procedures;

b. Applicants shall comply with all requirements stipulated in 2 CFR § 200.206 (Federal

awarding agency review of risk posed by applicants) related to the review of applicant risk

requirements;

c. Verification that a completed Form CD-511 (Certification Regarding Lobbying) is complete;

20 April 2021

d. The appropriate funding instrument was used in a particular transaction, i.e., grant,

cooperative agreement, or contract, in accordance with 2 CFR § 200.201 (Use of grant agreements

(including fixed amount awards), cooperative agreements, and contracts);

e. Assurance that the proposed award was coordinated with any other operating units or

Federal agencies, as appropriate.

6. Original fully executed award documents and any amendments with all attachments (except

OMB Circulars and applicable uniform administrative requirements, which will be listed on the award

document).

7. Memoranda of negotiations with the recipient, if applicable, and correspondence between the

recipient and the organization unit in the pre-award and post-award phases.

8. Advance understandings or waivers of generally applicable award requirements.

9. Documentation when delegation of authority is authorized in accordance with Chapter 4 of this

Manual. The following is the minimum documentary information which must be a part of the official file

when the Grants Officer exercises this delegation of authority:

a. The specific section of 2 CFR Part 200 (see 2 CFR § 200.102 (Exceptions)) for which a less

restrictive requirement is imposed or for which a case-by-case exception is made;

b. The reason/justification for approval of the less restrictive requirement or the exception;

and

c. The specific award condition included in the grant or cooperative agreement to provide the

less restrictive requirement or exception.

10. Performance/program, financial, patent, property, and other reports submitted by the recipient

and all written evaluation/clearance by the Program Officer or other officials.

11. Property records, including any documentation relating to disposition of property or the filing of

security interests. The Tangible Personal Property Report (SF-428) and the Real Property Status Report

(SF-429) should be included in documentation, as applicable.

12. Recipient requests for changes requiring amendments, and all correspondence and evaluations

of the proposed changes.

13. Site visit reports, as applicable.

14. Project audit reports, including documentation of actions taken, the resolution and

implementation of audit findings.

15. Close-out documents including, but not limited to, final financial, progress, property, patent,

20 April 2021

16. Other correspondence regarding the project including, but not limited to, interagency and

Congressional correspondence.

17. Documentation of any agreements to transfer funds from other agencies including, but not

limited to, interagency agreements pursuant to the Economy Act or other special agreements. The file

must clearly reference the authority under which funds are transferred, the transferring agency’s

authority to transfer the funds and its ability to award financial assistance for such a project, and DOC’s

authority to accept the funds and to award funds for that specific project.

[Note: When DOC provides Federal funds to another Federal agency that is administering a

collaborative project with the Department, the agreement governing that transfer of funds must

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

B. Costs under DOC Awards

The Uniform Guidance supersedes cost principles set out in OMB Circulars and codified at 2 CFR

Parts 220, 225, and 230, but does not supersede the Contract Cost Principles, which generally apply to

for-profit entities. At 2 CFR § 200.101(a)(2), the Uniform Guidance provides that agencies may, but are

not required to, apply Subparts A through E of 2 CFR Part 200, which include the cost principles at

Subpart E, to for-profit entities. Therefore, the Grants Officer in consultation with the Program Office

may elect to apply the cost principles under the Uniform Guidance (see Subpart E to 2 CFR Part 200) or

the Contract Cost Principles when making an award to a for-profit entity.

[Note: If the Grants Officer applies 48 CFR Part 31 to an award to a for-profit entity, then 2 CFR Part 200

Subpart E would not apply.]

C. Amendments

DOC awards can only be amended, changed or modified by the cognizant Grants Officer. No other

DOC official is authorized to make amendments, changes, or modifications to awards. When the change

meets any of the following criteria, the Grants Officer will document said change by issuing a CD-451:

• Change in scope or objective;

• Revisions requiring additional funds;

• Extensions to the period of performance;

• Budget revisions when the cumulative transfers among direct cost categories exceed 10% of the

total Federal and non-Federal funds authorized by the Grants Officer and the Federal share is

greater than the Simplified Acquisition Threshold (currently $250,000);

• Inclusion of costs requiring prior approval, as specified by the Cost Principles at 2 CFR Part 200

Subpart E; and

• Under non-construction projects: contracting for, sub-granting, or otherwise obtaining the

services of a third-party to perform activities central to the purpose of the award.

[Note: FALD may need to review proposed competitive financial assistance awards where the

amount of Federal funding exceeds the simplified acquisition threshold. See Chapter 4.C.3.c. for

further guidance.]

20 April 2021

For no-cost administrative changes not included in the list above, the Grants Officer may elect to

issue a letter notifying the recipient of the change and documenting said change in the official award

file.

Examples of when a letter is acceptable for documenting change in the award include:

• Transfer of funds between direct and indirect cost categories;

• Foreign travel requiring approval under the Fly America Act;

• Changes in the federal program officer or grants administration officials; or

• Notification to recipients of compliance with specific award conditions.

D. Project Monitoring

The purpose of project monitoring is to ensure that recipients fulfill the terms and conditions of

their awards. Project monitoring shall be the joint responsibility of the Grants Officer, Program Officer,

award recipient, and/or their designees. Monitoring may include performing site visits, preparing

written and/or oral reports, holding meetings, or any other form of communication deemed appropriate

by the Grants Officer for keeping apprised of project progress. See 2 CFR § 200.329 (Monitoring and

reporting program performance). Grants Officers and Program Officers may request audit assistance

from the OIG in fulfilling their monitoring responsibilities. Allegations of fraud, waste, and abuse may

also be referred to the OIG or made anonymously through the OIG Hotline at 1-800-424-5197.

E. Recipient Responsibilities

Recipients of DOC financial assistance awards are responsible for achieving the scope of work and

other activities delineated in the proposal as incorporated into their awards and any DOC-approved

amendments thereto. Recipients are also responsible for ensuring that they comply with all of the

terms and conditions of their awards and with the provisions made as part of the award including, but

not limited to, exercising appropriate financial management, accounting, and control over award funds

and other assets; and reporting to the Grants Officer and Program Officer as required under the terms

and conditions of their award.

Award recipients that issue subawards, i.e., entities that function in whole or in part as pass-through

entities, are subject to the requirements of 2 CFR § 200.311 (Real property). These requirements place

specific obligations on pass-through entities that are similar to the requirements placed on Federal

agencies for administering financial assistance awards.

20 April 2021

11. ENFORCEMENT

A. Overview

The Grants Officer, in consultation with the Program Office, is authorized to take appropriate actions

if recipients fail to meet their obligations under awards. Proposed suspensions and terminations must

be reviewed by FALD prior to execution. Every grant and cooperative agreement contains a provision

for suspension and/or termination of the award for deficient project performance, poor financial

management, non-payment of accounts receivable, and/or other non-compliance or deficiency

problems. Suspension or termination of an individual award is not an action covered by the provisions

of 2 CFR Part 1326 and Part 180 (Nonprocurement Debarment and Suspension).

B. Enforcement

Enforcement actions may include, but are not limited to, discussions of corrective actions needed,

written notice delineating needed actions; pre-enforcement warnings; imposition of risk-based specific

award conditions; suspension of the award, suspension of payment, or both; termination of the award;

or debarment or suspension of the recipient pursuant to 2 CFR Part 1326 and Part 180. See 2 CFR §

200.339 (Remedies for noncompliance) through 2 CFR § 200.343 (Effects of suspension and

termination).

1. Pre-Enforcement Actions. If a violation of an award is not material, discussions with the

recipient of corrective actions needed or a written notice delineating needed actions may be sufficient

to resolve the situation. Discussions or written notices should identify the problem and establish a time

frame for the recipient to take corrective action. If the recipient fails to respond or implement

corrective action, a pre-enforcement warning, which identifies the problem and the expected time

frame for the recipient to resolve the matter, may be appropriate. A warning should also include the

actions the operating unit intends to take if the problem is not corrected promptly.

2. Risk-based Specific Award Conditions. If a recipient materially fails to comply with the terms

and conditions of an award, the Grants Officer may impose specific award conditions pursuant to 2 CFR

§ 200.208 (Specific conditions). Such specific conditions may include placing the recipient on

reimbursement only, or other requirements unique to the circumstances at hand. The recipient must be

notified in writing of the specific award conditions and informed of corrective actions necessary to

remove the restrictions in accordance with 2 CFR § 200.208(d).

3. Suspension of Payments. Suspension of payments is an enforcement action available to the

Grants Officer when he/she determines it is necessary to temporarily withhold payments of funds

pending correction of identified deficiencies by the recipient or more severe enforcement action by the

Grants Officer. Such action may be carried out by suspending the Recipient’s access to the Department

of Treasury’s Automated Standard Application for Payment (ASAP) System, when the terms of the award

provide for payments to the recipient through ASAP. The imposition of a suspension of payments does

not halt activities under an award, and the recipient may continue to incur costs during the suspension

of payments. Only the Grants Officer is authorized to suspend payments under an award or lift the

suspension once it is imposed. The recipient must be notified of the suspension in writing. At a

minimum, the notice must be sent by certified mail or electronically, with confirmation of receipt, and

must state that the Department is imposing suspension of payments, the reason(s) why, and what

corrective action the recipient must take in order to remedy the situation. If immediate action is not

20 April 2021

necessary to protect the government’s interest, the Grants Officer should provide 30 days’ notice,

informing the recipient that, unless information is received within the 30 days establishing compliance

by the recipient with the requested remedial actions, the Department will proceed with the suspension

of payments. A suspension of payments may be imposed regardless of whether the recipient has

submitted any pending payment requests. If specified corrective actions are not taken, the Grants

Officer may, after considering the best interests of the government, take more severe enforcement

action, including termination of the award.

4. Suspension of Award. Suspension of an award is an enforcement action available to the Grants

Officer when it is determined that circumstances warrant temporarily halting all activities under an

award, including making payments to the recipient, pending the recipient taking corrective actions as

specified by the Grants Officer. Such action may be carried out by suspending the Recipient’s access to

the Department of Treasury’s ASAP System, when the terms of the award provide for payments to the

recipient through ASAP. All activities under an award must cease and no costs may be incurred by the

recipient during the suspension. Only the Grants Officer is authorized to suspend an award or lift a

suspension once it is imposed. Suspension of an award must be documented in writing and included in

the official award file. The recipient must be notified of the suspension in writing. At a minimum, the

notice must be sent by certified mail or electronically with confirmation of receipt, must state that the

Department is imposing suspension of the award, the reasons why, and what the recipient can do to

remedy the situation. If immediate action is not necessary to protect the government’s interest, the

Grants Officer should provide a minimum of 30 days’ notice, informing the recipient that, unless

information is received within the 30 days establishing compliance by the recipient with the requested

remedial actions, the Department will proceed with the suspension of the award. If specified corrective

actions are not taken, the Grants Officer may, after considering the best interests of the government,

take more severe enforcement action, including termination of the award. Suspension of an award may

result in a no-cost extension of the award period to compensate for the work that was not conducted on

the project during the suspension.

5. Termination for Noncompliance with Award Terms (frequently referred to as termination for

cause). The Grants Officer may terminate any DOC award for material noncompliance, which includes,

but is not limited to, violation of the terms and conditions of the award; failure to perform award

activities in a satisfactory manner; improper management or use of award funds; or fraud, waste, abuse,

mismanagement, or criminal activity. All termination for material noncompliance actions must be

documented in the official award file in writing. The recipient must be notified of the termination action

in writing using the same minimum requirements listed under a suspension in Paragraph 4., above, if a

suspension that notified the recipient of potential termination for noncompliance did not precede the

termination action. See 2 CFR §§ 200.339 and 200.340(a)(1).

6. By the Federal awarding agency or pass-through entity, termination to the greatest extent

authorized by law, if an award no longer effectuates the program goals or agency priorities. (2 CFR §

200.340 (a)(2)).

7. Reporting of Termination Actions. When a Federal awarding agency terminates a Federal award

prior to the end of the period of performance due to the non-Federal entity's material failure to comply

with the Federal award terms and conditions, the Grants Officer must report the termination to the

OMB-designated integrity and performance system, currently the Federal Awardee Performance and

Integrity Information System, (FAPIIS). See 2 CFR § 200.340 (Termination), and 2 CFR § 200.341

20 April 2021

(Notification of termination requirement). The non-Federal entity shall be informed of the FAPIIS

reporting and their right to comment on the information reported.

C. Concurrent Actions

Occasionally, when considering an administrative enforcement action, the Grants Officer may

discover or be aware that other actions are concurrently ongoing or are about to be initiated against a

recipient and/or its officers or employees. Such other actions may include OIG audits and/or

investigations, and criminal or civil investigations/prosecutions by the Department of Justice. In such

instances, it is important to coordinate, to the extent possible, any proposed administrative

enforcement action with the authorities pursuing the other actions, in order to avoid any adverse

impact on those other actions. Accordingly, when the Grants Officer is proposing enforcement action

requiring FALD review and an opportunity to comment (suspensions and terminations), or requiring

FALD clearance (proposed debarments and suspensions under 2 CFR Part 1326 and Part 180), FALD must

be informed about the other actions, so that it can assist, if necessary, in the proper coordination with

the other authorities. In addition, FALD must be informed of any other actions when the Grants Officer

requests FALD’s review of lesser administrative enforcement actions or of non-enforcement termination

(that is, by mutual agreement or by the recipient).

1. Termination by Mutual Agreement or by the Recipient. In financial assistance, the Federal

Government may not terminate an award unilaterally for the convenience of the government.

However, per 2 CFR § 200.340(a)(3) and (a)(4), an award may be terminated under the following

conditions:

(a) By the Grants Officer with the consent of the recipient, in which case the two parties shall

agree upon the termination conditions, including the effective date and, in the case of partial

termination, the portion to be terminated; or

(b) By the recipient upon sending to the Grants Officer 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 the Grants Officer 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.

All termination actions must be documented in the official award file in writing. See 2 CFR § 200.340

(Termination).

2. Debarment and Suspension of a Recipient. Debarment and suspension of a recipient are actions

taken pursuant to 2 CFR Part 1326 and Part 180, which implements EO’s 12549 and 12689. The actions

are intended to debar or suspend a recipient organization from participating in any Federal program,

government-wide. Debarment and suspension are imposed not as punishments, but to protect the

interests of the government. The integrity or present responsibility of an applicant or recipient is at

issue in a debarment or suspension, and such action is imposed only in egregious circumstances; e.g.,

when a recipient or applicant has been indicted and/or convicted of a criminal offense, or the facts

indicate that the recipient’s actions indicate a lack of present responsibility. All of the regulatory

requirements of 2 CFR Part 1326 and Part 180 must be met before a recipient organization can be

debarred or suspended from participation in Federal programs. This action must be distinguished from

suspension of an individual award by a Grants Officer as discussed above. The FALD shall review all

proposed debarments and suspensions under 2 CFR Part 1326 and Part 180.

20 April 2021

12. AWARD CLOSE-OUT

Proper award closeout is required for all DOC financial assistance awards. An award expires at

midnight local time for the recipient on the date which is listed on the last approved amendment (Form

CD-451) as the "Extend Period of Performance To" date or on the original Financial Assistance Award

document (Form CD-450) as the "Period of Performance." General procedures for award closeout are

contained in 2 CFR §§ 200.344 (Closeout) and 200.345 (Post-closeout adjustments and continuing

responsibilities).

A. Responsibilities

1. The Grants Officer has overall responsibility for ensuring that the award is properly closed-out

and the necessary documentation is included in the official award file. Once all documentation has been

received and no further action is required, the Grants Officer shall notify the recipient in writing, with a

copy of the notification to the Program Officer, that the grant has been satisfactorily closed.

2. The Grants Officer or designee is responsible for notifying the recipient when the award is

nearing completion, and for reviewing and evaluating the final financial, performance, property, and

patent reports, as applicable.

a. Within 120 calendar days of project completion (which may be extended by the Grants

Officer upon written request by the recipient), the recipient shall submit all financial, performance,

and other reports as required by 2 CFR § 200.344 (Closeout) and by the Terms and Conditions of the

Award. The subrecipient is required to submit its final performance report to the pass-through

entity within 90 calendar days unless an extension has been granted.

3. When applicable, the Grants Officer will provide the recipient with instructions for disposition of

property loaned to the recipient by the Federal Government or purchased by the recipient with grant

funds.

4. The Grants Officer must make every effort to complete closeout actions no later than one year

after the end of the period of performance unless otherwise directed by authorizing statutes. Closeout

actions include Federal awarding agency actions in the grants management and payment systems.

B. Unobligated Funds

1. If at the completion of an award period, the recipient has an unobligated balance of funds on

hand, those funds shall be promptly returned to the Federal Government. If the funds are not returned

by the recipient in a timely manner, an account receivable may be established and billed to the

recipient. Interest, penalties, and administrative charges shall be assessed, as appropriate.

2. Recipients with outstanding accounts receivable established (e.g., to collect unobligated funds)

are subject to debt collection procedures at Chapter 14, Section C., of this Manual.

20 April 2021

C. Deobligation of Funds

Within ninety (90) calendar days of receipt of the final SF-425 (Federal Financial Report) showing no

unliquidated obligations, the Grants Officer shall notify the Finance/Accounting Officer to deobligate the

unobligated balance of funds not disbursed to the recipient. No funds will be deobligated unless

requested by the Grants Officer.

[Note: The ninety (90) calendar day window above does not apply to those awards that remain open

due to administrative delays (i.e. for legal issues, to include audit issues or bankruptcy filings as well as

delays caused by incomplete final indirect cost rate determinations). Under situations where an award

closeout is administratively delayed, reconciliation of the final SF-425 will be completed once all

administrative closeout requirements are resolved.]

D. Retention of Records

1. General procedures for record retention are contained in 2 CFR § 200.334 (Retention

requirements for records).

2. In cases where a recipient will no longer be in operation after a grant has been completed, the

operating unit shall require the recipient to:

a. Identify where records pertaining to the grant project will be located for the required three

(3) year retention period; and

b. Provide appropriate assurances of government access thereto.

E. Unilateral Termination and/or Administrative Closeout

1. The Grants Officer will effectuate the unilateral termination and/or administrative closeout of:

a. expired and unexpired awards pending closeout where the recipient is no longer in

existence; and

b. expired awards pending closeout where the recipient is in existence, but unresponsive to

bureau notifications and attempts to contact.

2. The unilateral termination and/or administrative closeout procedure does not apply to

unexpired awards where the recipient is in existence, but materially non-compliant with the terms and

conditions of the award. In such cases, the Grants Officer should take appropriate enforcement action

under the award in accordance with 2 CFR § 200.344 (Closeout), the terms and conditions of the award,

Chapter 11 of this Manual, and bureau policy. Once an active award is terminated, such an award may

become subject to this procedure.

20 April 2021

3. The unilateral termination and/or administrative closeout procedure also does not apply to

recipients that are a party to an active bankruptcy case which, in accordance with Chapter 4 of this

Manual should be coordinated with the OGC General Litigation Division with such coordination generally

through the OGC Federal Assistance Law Division (FALD). The OGC General Litigation Division (through

FALD) should also be consulted where a recipient is dissolved or reorganized upon an order of the U.S.

Bankruptcy Court.

4. All operating units are required to satisfy all of the conditions listed below, as well as resident

operating unit policy, and to document the official award file to adequately capture the operating unit’s

due diligence efforts in determining that a recipient is no longer in existence and that the award should

be unilaterally terminated and/or unilaterally closed out by the Grants Officer. Operating units shall:

a. Use all existing contact information (to include electronic mail and telephone numbers) to

contact the recipient organization.

b. Send a letter to the recipient by certified mail, return receipt requested, following the

general template provided in the Sample Business Official's Notice to Submit Documentation

(Appendix A of this chapter) to the recipient’s most recent address as reflected in the official award

file. At the Grants Officer’s discretion and as part of the operating unit’s due diligence process,

duplicate letters may also be sent to other addresses listed for the recipient. The certified letter

may be modified from the template to incorporate any necessary operating unit specific

requirements or policies, provided such requirements are consistent with this Manual.

c. Conduct a search of SAM to determine if the recipient has an active SAM registration with

current information as well as Do-Not-Pay’s death list(s) as appropriate.

d. Conduct an electronic search of the Secretary of State website for the State in which the

recipient is incorporated to determine if the recipient organization remains in existence and is an

organization in good standing relative to State organizational filings and other State requirements.

e. Thoroughly document all efforts to contact the recipient. The Missing Data Report and Due

Diligence Checklist (Appendix B of this chapter) may be used as a general template for the report or

an appropriate operating unit specific form may be substituted. This report should be completed by

the assigned Grants Specialist or Team Lead and reviewed by the Grants Officer or other appropriate

official. The Grants Officer will sign the report once he/she is satisfied that the proper due diligence

was conducted and that the recipient is no longer in existence.

In accordance with Chapter 4 of this Manual, FALD review of actions pursuant to this closeout

procedure is not required, but may be requested by the Grants Officer where there are specific

questions or concerns relative to a recipient's organizational status or relative to the adequacy of

the operating unit's due diligence efforts.

20 April 2021

f. Upon a determination by the Grants Officer that the recipient is no longer in existence, the

Grants Officer, using the Sample Unilateral Termination and/or Unilateral Closeout Memorandum

(Appendix C of this chapter), or an appropriate operating unit specific memorandum, will document

the official award file relative to the unilateral termination and/or administrative closeout of the

award, and will further notify the operating unit’s Finance/Accounting Officer to deobligate any

undisbursed Federal funds relative to the subject financial assistance award. Unexpired awards

where the recipient is no longer in existence must be unilaterally terminated by the Grants Officer in

a separate action or as part of the action providing for the administrative closeout of the award.

Award termination actions must be carried out by the Grants Officer in accordance with 2 CFR §

200.344 (Closeout), Chapter 11 of this Manual (Enforcement), and resident operating unit policy.

g. In accordance with Chapter 14 of this Manual, the operating unit, in consultation with

operating unit’s Finance/Accounting Officer and FALD, should investigate the appropriateness of

establishing an accounts receivable against the recipient for some or all of the Federal award funds

that are not properly accounted for or expended by the recipient (e.g., a recipient’s failure to file SF-

425s or to submit A-133 or project-specific audits, as required under the terms and conditions of the

subject award).

h. The unilateral termination and/or administrative closeout of a financial assistance award

generally does not affect any later disallowance or adjustments relative to the award, including but

not limited to the Department’s right to disallow costs or to recover funds later determined to be

due the Federal Government. See 2 CFR §§ 200.344 (Closeout) and 200.345 (Post-closeout

adjustments and continuing responsibilities).

20 April 2021

Appendix A: Sample Business Official’s Notice to Submit Documentation

[mm/dd/yyyy]

[Organization Name]

Attn: ______________________

Recipient Address

Reference: Award Number:

Program Title:

Dear [Business Official Name or Representative of the Recipient]:

This notice is regarding the closeout documents for the subject award. In accepting the award, [insert

recipient name] agreed to comply with the Department of Commerce’s (DOC) policies, including the

requirement for submitting (final) reports in a timely manner. Despite previous efforts, the following

report(s) are now delinquent (select as appropriate from this list):

* Final Financial Status Report (SF-425)

* Final and/or Quarterly Progress Report as applicable

* Equipment Inventory List Authorization/Purchase

* Final Invention Statement and Certification: As applicable/required

* Audit(s): As applicable/required

* Other Agency specific required documents

Please submit by e-mail in PDF format the document(s) requested to ___________________. If

electronic transmissions are not available, hardcopy submissions are acceptable to the following

address:

____________ Grants Office

Attn: __________________________, Grants Management Specialist

Failure to comply with the terms and conditions of the award, including but not limited to the award’s

closeout requirements, may result in appropriate enforcement action under the award, including but

not limited to termination of the award and the establishment of an account receivable against the

recipient organization. Moreover, the failure to comply with the award’s closeout requirements may

have a negative impact on future funding from the Department of Commerce.

20 April 2021

[INSERT THIS PARAGRAPH FOR ACTIVE AWARDS] By way of this letter and in accordance with 2 CFR Part

200, your organization is hereby notified that [insert grant-making operating unit] intends to unilaterally

terminate this award for material noncompliance, unless the information and documentation set forth

above is received within 30 days of the date of this letter.]

Please direct any questions regarding this matter and, also, send any notice(s) that the recipient has

filed for federal bankruptcy protection to the above-referenced point of contact.

Sincerely,

_____________________________________

Grants Officer

20 April 2021

Appendix B: Sample Missing Data Report and Due Diligence Checklist

Recipient Name:

Project Title:

Award Number:

Period of performance:

[mm/dd/yyyy] to [mm/dd/yyyy]

Missing Data Report Instructions:

In the table below, document missing files, letters, reports or other requirements. An "Action" includes any of the following: telephone

call/message, e-mail, FAX, meeting, or any other form of communication made to obtain the missing document.

Missing Item/File Action

Date

[mm/dd/yyyy]

Result/Outcome Remarks and/or Comments

20 April 2021

Appendix B: Sample Missing Data Report and Due Diligence Checklist (continued)

Due Diligence Checklist Instructions:

Complete the checklist below to document the efforts made to contact the recipient.

Action

Date

[mm/dd/yyyy]

Result/Outcome Remarks and/or Comments

Contact attempt – email

Contact attempt – telephone

Certified mail

SAM search

Secretary of State website search

Grants Officer Name:

(Type or Print):

Team Lead Name:

(Type or Print):

(Signature) (Signature)

20 April 2021

Appendix C: Sample Unilateral Termination and/or Unilateral Closeout Memorandum

Memorandum

Date: [mm/dd/yyyy]

To: [Insert Grants Team Leader’s Name]

From: [Insert Grants Management Official’s Name]

Subject:Unilateral Termination and/or Unilateral Administrative Closeout

Recipient Name:

Award Number:

Period of Performance: [mm/dd/yyyy] through [mm/dd/yyyy]

In accordance with Chapter 12 of the Department of Commerce Grants and Cooperative Agreements

Manual (Award Closeout), the Grants Specialist assigned to this award has made reasonable efforts to

obtain the outstanding information and documentation from the recipient. Based on these due

diligence efforts, as documented in the official award file for this project this award is being unilaterally

terminated and/or is being unilaterally closed out.

The Finance/Accounting Office is being advised of this action, with a corresponding request that the

undisbursed award funds in the total amount of $_______ be deobligated from the award.

[Additionally, an account receivable for the total disbursed award funds will be established in the

amount of $______.]

_____________________________________ ______________________

Grants Officer Date

Attachment: Missing Data Report and Due Diligence Checklist

20 April 2021

13. AUDITS

A. Audit Requirements

Subpart F to 2 CFR Part 200 (Audit Requirements) implements the Single Audit Act Amendments of

1996, 31 U.S.C. § 7501 note, establishing uniform audit requirements for non-Federal entities that

administer Federal awards. To the extent that audits performed in accordance with Subpart F meet DOC

needs, DOC shall rely upon and use such audits. In accordance with the DOC ST&Cs, for-profit and other

organizations not covered by the audit provisions of Subpart F shall be subject to the audit requirements

as stipulated in the award or sub-award document. In accordance with 2 CFR § 200.501(d), a non-

Federal entity that expends less than $750,000 annually in Federal awards is exempt from Federal audit

requirements except as noted in 2 CFR § 200.503 (Relation to other audit requirements), unless a

program-specific audit is required by a specific award condition and funded by the award.

1. Organization-Wide Audits. Organization-wide audits shall be performed in accordance with the

Single Audit Act Amendments of 1996, 31 U.S.C. § 7501 note, as implemented by 2 CFR Part 200,

Subpart F. Recipients that are subject to Subpart F and that expend $750,000 or more annually in

Federal awards shall have an organization-wide audit performed in accordance with Subpart F except

when they qualify and elect to have a program-specific audit performed in accordance with exceptions

in the Subpart. Organization-wide audits will generally be conducted annually, or biannually as

authorized under 2 CFR § 200.504 (Frequency of audits).

2. Program-Specific Audits. Program-specific audits are allowable under Subpart F in certain

circumstances in lieu of the organization-wide audit. Under 2 CFR § 200.501(c), when an auditee

expends Federal awards under only one Federal program (excluding R&D) and the Federal program's

statutes, regulations, or the terms and conditions of the Federal award do not require a financial

statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in

accordance with 2 CFR § 200.507 (Program-specific audits). A program-specific audit may not be

conducted for research and development unless all of the Federal awards expended were received from

the same operating unit, or the same operating unit and the same pass-through entity, and the Grants

Officer or appropriate representative of the pass-through entity in the case of a subrecipient, approves a

program-specific audit in advance. Program-specific audits will be conducted annually unless otherwise

authorized under 2 CFR § 200.504 (Frequency of audits).

3. Submission of Audit Report and Data Collection Form.

a. Requirements for submission of audit reports, including instructions for data collection forms,

are set forth in 2 CFR §§ 200.507 (Program-specific audits) and 200.512 (Report submission), and DOC

ST&Cs.

b. A non-Federal entity subject to Subpart F of 2 C.F.R. Part 200 must, within 90 days of the end of

its fiscal year, notify the Grants Officer of the amount of Federal awards, including all DOC and non-DOC

awards, that the non-Federal entity expended during its fiscal year.

20 April 2021

B. Other Audits

An audit of an award may be conducted at any time as indicated in the DOC ST&Cs. The

following is a list of other audits outside of the Single Audit Act that may be required by DOC.

1. Audits of For-profit, Organizations, Sole Proprietors, and Individuals. A for-profit organization,

sole proprietor, or individual receiving a DOC award must have a program-specific or other audit

performed where the federal share amount awarded is $750,000 or more over the duration of the

period of performance, or as specified in the award. The DOC award may include a line item in the

budget for the cost of the audit. If DOC does not have a program-specific audit guide available for the

program, the auditor should follow Generally Accepted Government Auditing Standards (GAGAS) and

the requirements for a program-specific audit as described in 2 CFR Part 200, Subpart F, if applicable. A

copy of the program-specific audit shall be submitted to the Grants Officer at the address specified in

the award document.

2. Audit Conducted by the OIG. When an audit is conducted by the OIG, the OIG will usually make

the arrangements for the audit, whether the audit is performed by the OIG personnel, an independent

accountant under contract with DOC, or any other Federal, state, or local audit entity.

3. Audit Required by the Award. When an audit is required under a specific award condition, the

recipient will usually make the arrangements for the audit. The audit shall be performed in accordance

with a program-specific audit guide, if one is available for that program, or GAGAS and the requirements

for a program-specific audit as described in Subpart F of 2 CFR Part 200, if applicable. The recipient shall

submit copies of program-specific audits in accordance with the guidance in the program-specific audit

guide. If no guide is available, a copy of the audit shall be submitted to the Grants Officer at the address

specified in the award document.

C. Access to Recipient Records

Under the Inspector General Act of 1978, as amended, 5 U.S.C. App. 3, § 1 et seq., an audit of the

award may be conducted at any time. The Federal awarding agency, Inspectors General, Comptroller

General of the United States, and pass-through entity, or any of their authorized representatives, must

have the right of access to any documents, papers, or other records of the non-Federal entity which are

pertinent to the Federal award, in order to make audits, examinations, excerpts, and transcripts. The

right also includes timely and reasonable access to the non-Federal entity's personnel for the purpose of

interview and discussion related to such documents. See 2 CFR § 200.337 (Access to records).

D. Audit Resolution

1. In accordance with DAO 213-5, as revised on May 22, 2015, Department and operating unit

personnel shall act promptly to resolve both the financial and nonfinancial issues identified in an audit

report. Comments, arguments, and evidence (if any) submitted by the auditee and the operating unit

shall be considered in resolving the findings. A DOC decision on the resolution of audit findings and

recommendations will be made in accordance with the procedures and within the specified timeframes

identified in DAO 213-5.

2. The audit action official (as defined in DAO 213-5) shall issue the Audit Resolution

Determination. The Audit Resolution Determination will be maintained in the official grant file and a

copy will be forwarded to the Program Officer.

20 April 2021

3. Recipients are responsible for the collection of audit-related debts from their subrecipients

where an audit has determined funds are owed. This does not relieve the recipient of liability for the

debt.

4. Disputes arising from audit resolution, which cannot be resolved at the bureau or Department

level shall be decided in accordance with the appeal procedures and specified time frames outlined in

DOC's "Policies and Procedures for Resolution of Audit-Related Debts," 54 Fed. Reg. 4053 (January 27,

1989), as clarified and updated in DAO 213-5 (May 22, 2015). The appeal procedure is the last

opportunity for auditees to provide evidence to support their contentions. The DOC will not accept any

submission from a recipient regarding an appeal after the established deadline, unless requested by the

Grants Officer, the OIG, or the OGC. After the Department renders a decision on an appeal, there are no

other administrative appeals available within DOC.

5. An audit of the award may result in the disallowance of costs incurred by the recipient and the

establishment of a debt (account receivable) due DOC.

6. Operating units are responsible for submitting a monthly update of all unresolved audits to

OAM/GMD by the third Friday of each month.

E. Audit Implementation

Audit follow-up and implementation shall be conducted in accordance with the requirements of the

Inspector General Act of 1978, as amended, 5 U.S.C. App. 3, § 1 et seq. and Subpart F of 2 CFR Part 200,

as implemented by DAO 213-5.

20 April 2021

14. ESTABLISHMENT AND COLLECTION OF FINANCIAL ASSISTANCE-RELATED

DEBTS

A. Standards for the Establishment and Collection of Debts

In accordance with the DOC credit and debt management procedures, debts owed to the DOC,

including to its operating units, shall be properly and promptly established, billed, and collected. The

authorities listed below must be adhered to in the establishment and collection of debts related to DOC

grants and cooperative agreements:

1. Debt Collection Act (DCA) of 1982, as amended (31 U.S.C. § 3701 et seq.) and the Federal Claims

Collection Standards (31 CFR Parts 900-904);

2. DOC debt collection regulations set forth in 15 CFR Part 19 (Commerce Debt Collection);

3. 2 CFR § 200.346 (Collections of amounts due);

4. DAO 213-5 (Audit and Evaluation Resolution and Follow-up);

5. DOC Credit and Debt Management Operating Standards and Procedures

Handbook (Debt Management Handbook);

6. OMB Circular A-129 Revised (Policies for Federal Credit Programs and Non-Tax Receivables); and

7. Any other relevant laws, regulations, OMB circulars, and DOC policies, including any DOC

operating unit-specific policies and procedures.

B. Establishment of a Debt

1. Debts owed to the Department are often established as a result of a financial assistance audit

resolution between the DOC and a non-federal entity. The establishment of an audit-related debt must

follow the substantive and due process notice requirements set forth in 31 U.S.C. § 3716(a), 15 CFR §

19.4, DAO 213-5 and Chapter 8 of the Debt Management Handbook.

2. Debts owed to the Department may be established against a non-federal entity for reasons

other than the resolution of financial assistance audits, such as the disallowance of costs by a Grants

Officer, or failure of a non-federal entity to meet cost sharing required by the award. In such cases, the

Grants Officer will provide proper notification to the recipient in accordance with 15 CFR § 19.4 and

Chapter 8 of the Debt Management Handbook and will coordinate the billing of the recipient with the

appropriate accounting or other office.

3. Both the audit resolution and debt collection processes require that debtors be given notice

concerning the debt and an opportunity to inspect and copy non-privileged records pertaining to the

DOC debt. All reasonable efforts should be made to satisfy the requirements of both in a single process.

In particular, the audit resolution determination should, wherever reasonably possible, also serve as a

demand and notice of intent letter as required by the DCA, as amended. See 15 CFR § 19.4 for the

elements that must be contained in the notice and demand letter; see also Debt Management

Handbook, Chapter 8. A sample notice and demand letter is set forth in Exhibit A to this Chapter.

20 April 2021

C. Debt Collection

1. DOC entities shall fairly and aggressively collect debts owed to DOC in accordance with the DCA,

15 CFR Part 19 and Chapter 8 of the Debt Management Handbook. In this connection, DOC operating

units shall use Debt Work Groups for follow-up with debtors and for the collection of delinquent debts.

2. A DOC financial assistance-related debt becomes delinquent when payment in full has not been

made by the due date specified in the operating unit’s initial written demand for payment, generally

between 30 and 60 calendar days from the date upon which the debt is established, unless other

payment arrangements have been made between the operating unit and the debtor (e.g., an

installment payment plan).

3. Delinquent debts shall be assessed the following charges (see, 31 CFR § 901.9, 15 CFR Part 19.5,

and the Debt Management Handbook Chapter 8):

a. An interest charge on the amount due shall be applied and collected. Interest will accrue on

the principal, or any portion thereof, owing and unpaid from the date the debt is established until it

is paid in full. However, interest will automatically be waived on any portion of the principal that is

paid within 30 calendar days from the date upon which the debt is established. The minimum

annual rate of interest to be charged is the Department of the Treasury's (Treasury) Current Value of

Funds. This rate is published annually in the Federal Register by Treasury and is available on the

website of Treasury’s Bureau of the Fiscal Service. The assessed rate shall remain fixed for the

duration of the indebtedness.

b. A penalty charge, not to exceed six percent a year, shall be added to delinquent debts. The

charge will accrue on the principal, or any portion thereof, owing and unpaid from the date of

delinquency, 31 days after the date the debt is established, until it is paid in full. However, the

charge will automatically be waived on any portion of the principal paid within 90 days of the date

of delinquency.

c. An administrative charge (currently $25.00) shall be applied to cover processing and

handling of the amount due.

d. In most cases, interest, penalties and administrative costs will continue to accrue during any

period when collection has been suspended for any reason (e.g., a debtor requested an audit

appeal) (see 15 CFR § 19.5(c)).

e. For specific information on waiving late charges, whether additional interest, penalty

charges, or administrative charges, refer to 15 CFR § 19.5(b) and Chapter 8 of the Debt Management

Handbook.

4. The Grants Officer shall advise the recipient that payment of debts cannot be from funds

received from DOC or from other Federal financial assistance awards (including program income

generated under such awards) or result in a reduced level of program activity.

20 April 2021

5. Section 5 of the Digital Accountability and Transparency (DATA) Act of 2014 amends 31 U.S.C. §

3716(c)(6), Administrative Offset, and requires agencies to refer to Treasury valid, delinquent nontax

debts for the purpose of administrative offset at 120 days - 60 days earlier than the previous 180-day

requirement. DOC is cross serviced by Treasury for administrative offset. As a result, effective October

1, 2015, all debts delinquent by more than 120 days must be referred to Treasury for cross-servicing,

which will allow for referrals to Treasury for administrative offset. See Debt Management Handbook,

Chapter 8, Section 1.0. DOC debts delinquent for less than 120 days may be transferred for cross-

servicing at the election of DOC. The appropriate official must comply with notification requirements

contained in 15 CFR Part 19, before debts are transferred to Treasury for action. See also 31 CFR Part

901 (Standards for the administrative collections of claims).

D. Impact of Delinquent Federal Debts on Award Eligibility

1. Delinquent debtors are ineligible for and barred from obtaining Federal loans, loan insurance or

guaranties. As required by 31 U.S.C. § 3720B and 31 CFR § 901.6, Commerce entities will not extend

financial assistance in the form of a loan, loan guarantee, or loan insurance to any person or

organization delinquent on a debt owed to a Federal agency. This prohibition does not apply to disaster

loans, unless otherwise required by statute, and DOC entities may extend credit after the delinquency

has been resolved. See 15 CFR § 19.17(a) for situations where a waiver of ineligibility may be granted.

2. A debtor who has a judgment lien against the debtor’s property for a debt to the United States

is not eligible to receive grants, loans or funds until the judgment is paid in full or otherwise satisfied.

This prohibition does not apply to DOC funds that the debtor is entitled to as a beneficiary. See 15 CFR §

19.17(b) for situations in which this prohibition may be waived.

3. Unless otherwise prohibited by law and in accordance with 15 CFR § 19.17(c), DOC entities with

the authority to do so under the circumstances should deny, suspend or revoke licenses, permits or

other privileges for any inexcusable or willful failure of a debtor to pay a debt. The DOC entity

responsible for distributing the licenses, permits or other privileges will establish policies and

procedures governing suspension and revocation for delinquent debtors.

4. In accordance with 15 CFR § 19.17(d), it is the policy of DOC that no award of Federal funds shall

be made to an applicant who has an outstanding delinquent DOC debt until:

a. The delinquent account is paid in full;

b. A negotiated repayment schedule is established and at least one payment is received; or

c. Other arrangements satisfactory to DOC are made.

5. Once an outstanding receivable becomes a delinquent Federal debt, no further awards to the

recipient may be considered until the debt is paid, except in circumstances cited in subparagraph 4,

above, and discussed in subparagraph 6, below. This includes debts that have been written off, but not

yet closed out. Although a delinquent debt becomes inactive once it is written off and the operating

unit takes no further action to collect it, the debt is still owed to the Federal Government. If, however,

the debt is then closed out by the Finance/Accounting Officer, no further collection action may be taken

20 April 2021

after the debt is reported to the IRS on Form 1099-G (Certain Government Payments) as income to the

debtor.

6. Federal policy as established under OMB Circular A-129 (Managing Federal Credit Programs)

requires the aggressive but fair management of Federal receivables. It is the general policy of DOC that

delinquent outstanding receivables be repaid in full in a lump sum. Mitigating circumstances may exist

that justify issuance of an award outside the parameters of the policy if a repayment schedule is

negotiated and approved and one payment received, or other arrangements satisfactory to DOC are

made before an award is issued. Issuance of an award to a recipient who has an outstanding debt must

be in accordance with the guidance provided below. The steps taken to safeguard the Federal

Government's interests until repayment is made must be noted in the official award file.

a. In the event that a recipient is unable to repay the delinquent debt in one lump sum, a

repayment schedule may be formally negotiated and entered into by the operating unit and the

recipient. As long as the recipient is making payments in accordance with the repayment schedule,

a new award may be made. Recipients must be placed on a reimbursement payment method until

the debt is paid, unless the Grants Officer authorizes other arrangements.

(1) The Finance/Accounting Officer shall notify the Grants Officer and recipient when payment

on a repayment schedule is 10 calendar days delinquent.

(2) The Grants Officer may suspend payments under any current award(s) if payment on a

repayment schedule is 14 calendar days delinquent. The Grants Officer must suspend the current

award(s) when payment is 30 calendar days delinquent unless the Grants Officer determines and

sets forth in writing the reasons that it is not in the best interest of the Federal Government to do

so. This written determination shall become part of the official award file. Before sending the

request to suspend an award to the Finance/Accounting Officer and the notification of suspension

to the recipient, the Grants Officer must verify with the Finance/Accounting Officer that the

repayment schedule remains delinquent.

(3) Suspended awards may be reactivated when payment on the repayment schedule becomes

current.

(4) The Grants Officer may terminate a suspended award based on nonpayment of the debt.

b. Other extraordinary circumstances may exist which may warrant proceeding with an award

prior to repayment of a delinquent debt. Circumstances that merit such action include:

(1) The recipient has acknowledged that it owes the debt, and has made satisfactory

arrangements to repay; or

(2) The debt is reported as unpaid as a result of an error; or

(3) When a determination is made that:

(i) There may be sufficient justification for delaying repayment of the debt that merits further

investigation; and

20 April 2021

(ii) Not proceeding with the award will frustrate successful achievement of programmatic goals.

The Program Officer shall prepare and sign a written justification for the concurrence of the Grants

Officer, who shall maintain the documentation in the official award file. The justification must have the

concurrence of the Head of the Operating Unit or designee and be included in the official award file.

E. Exceptions

The procedures set forth in this chapter are applicable to all operating units except those that are

not subject to the disposition of claims under the DCA or its implementing regulations. Where an

operating unit is not required by law to follow DCA procedures, it must develop and follow its own

alternative procedures, but to the extent feasible, it also must comply with and employ the guidelines

set out in this chapter. As set forth in Debt Management Handbook, Chapter 8, Section 1.0, an

operating unit may follow procedures that differ from those in Chapter 8 of the Debt Management

Handbook (which are summarized in this Chapter of the DOC Grants Manual) only if approval of

alternative procedures has been granted in writing by the Deputy Chief Financial Officer and Director for

Financial Management. Any request for authority to deviate from these procedures must be submitted

to the Deputy Chief Financial Officer and Director for Financial Management and be accompanied by the

proposed alternative in detail.

20 April 2021

Exhibit A – Sample Notice and Demand Letter/Audit Resolution Determination

CERTIFIED MAIL – RETURN RECEIPT REQUESTED [Optional]

[Date]

[Name of Recipient/Debtor]

[Address Line 1]

[Address Line 2]

[Add “Attn:” and Name & Title of General Partner, Corporate President, or State Governmental Official,

as appropriate, for Organizational Recipients/Debtors.]

RE: [Name of Recipient/Debtor] (Recipient)

Audit Resolution Determination (Letter)

Financial Assistance Agreement Number: _________________________ (Agreement)

Audit Report Number: ___________________ (Audit Report)

Dear ________________:

Recipient entered into the Agreement with the U. S. Department of Commerce, [Operating Unit]

(Agency). An audit has been performed relating to the Agreement, the Audit Report prepared, and

Recipient provided a copy of the Audit Report. The Agency has reviewed the Audit Report (which

includes Recipient comments, if any), determined that Recipient owes the Agency a refund, and

established a debt in the amount of that refund. A summary of the financial and non-financial findings

in the Audit Report, and the Agency’s resolution of them, is enclosed as Exhibit A. [See Instructions for

Content.]

Debt and Demand for Payment

There is currently owing and unpaid by the Recipient to the Agency a debt, described above, in the

amount of $____________ principal, plus interest thereon at the rate of ____ % per annum. Demand is

hereby made for payment in full within 30 calendar days of the date of this Letter (Due Date). The

amount demanded should be paid in one lump sum by the Due Date in accordance with the bill enclosed

as Exhibit B. [Obtain bill from agency setting up the account receivable. Assure that the content of the

bill does not conflict with the terms of this Letter.]

Under the Debt Collection Act of 1982, as amended, 31 U.S.C. § 3701 et seq., and 15 CFR Part 19,

interest will accrue on the principal, or any portion thereof, owing and unpaid from the date of this

Audit Resolution Determination until the debt is paid in full. However, interest will automatically be

waived on any portion of the principal that is paid within 30 days. The rate of interest that Recipient will

be assessed is specified above and was determined in accordance with 31 U.S.C. § 3717.

The debt will be delinquent if not paid in full by the Due Date. If the debt becomes delinquent, interest

will continue to accrue on the principal balance remaining due and unpaid at that time, and Recipient

will also be assessed both a penalty charge and, to cover the cost of processing and handling the

delinquent debt, an administrative charge.

20 April 2021

The penalty charge will accrue on the principal, or any portion thereof, owing and unpaid from the date

of delinquency, 31 days after the date of this Audit Resolution Determination, until the debt is paid in

full. However, the penalty charge will automatically be waived on any portion of the principal paid

within 90 days of the date of delinquency. The penalty charge is ___ % per annum [maximum of 6.0%]

and the administrative charge is $_____ [currently $25.00]. Both charges are in accordance with 31

U.S.C. § 3717.

Interest and penalty charges will continue to be added until the entire debt has been paid in full. This

includes payment of all principal, interest, and penalty and administrative charges. Keep in mind that

any sums received will be applied first to administrative and penalty charges, then to interest, and lastly

to principal.

Collection Actions

The Agency is entitled to take all appropriate steps to collect delinquent debts and will do so in this case

if the debt is not paid as demanded above. Those steps may include:

• referring the debt to the U.S. Department of the Treasury for offset of Recipient’s

income tax refunds, Recipient’s contractor/vendor payments and any other Federal

payments, including but not necessarily limited to certain benefit payments and loans to

Recipient, that are not exempt from offset;

• referring the debt to a private collection agency;

• reporting the debt to a credit bureau;

• referring the debt to the U.S. Department of Justice for litigation;

• reporting the debt, if discharged, to the Internal Revenue Service as potential taxable

income;

• referring the debt to the U.S. Department of the Treasury for any of the above described

actions, which referral is required when the debt has been delinquent for 180 days; and

• performing administrative offset or common law set-off of the debt against any

payments or credits that may be owned to Recipient by the Agency.

Also, failure to pay the debt by the Due Date could result in payments being withheld under any current

Agency awards to Recipient and in the termination of such awards. In addition, Recipient will become

ineligible for Federal loans (except disaster loans), loan insurance or guaranties. Persons controlled by

[or controlling] [Add for Organizational Recipients.] Recipient may be similarly ineligible. Also, it is U. S.

Department of Commerce policy that no award of Federal funds shall be made to a grant or cooperative

agreement applicant who has an outstanding delinquent debt to the Department. [Finally, the Agency

may deny, suspend or revoke licenses, permits, or other privileges for any inexcusable or willful failure

of Recipient to pay the debt.] [Add where agency has such authority.]

The Agency believes that the payment of this debt is entitled to priority treatment in accordance with 31

U.S.C. § 3713. Failure to satisfy the Agency’s claims before paying the claims of other creditors may

result in the personal liability of one or more of Recipient’s officers, employees or other representatives

for this debt.

20 April 2021

Inspection and Copying of Documents

Recipient has the right to inspect and copy the agency records related to the debt as determined by the

responsible agency official(s). However, with respect to this debt, the responsible agency official(s) has

(have) determined that all documents have been previously provided to Recipient or are being provided

herewith. These documents include the applicable Financial Assistance Agreement, the Audit Report,

and this Audit Resolution Determination. If Recipient wishes additional copies, the Agency point of

contact identified at the end of this letter will, upon request, explain the procedures for inspecting and

copying the originals. [If this is a special case with additional or different documents, refer to and

enclose such records as are needed to support the proper establishment of the debt. Consult with legal

counsel respecting such cases.]

[Waiver of Indebtedness and] [Insert where applicable.] Repayment Agreement

[Recipient has the right to request, pursuant to ________, a waiver of all or a portion of the

indebtedness. [Add applicable statutory and regulatory authorities. Contact legal counsel for advice

in this regard.] If Recipient wishes to exercise this right, Recipient must do so within 60 days of the date

of this Audit Resolution Determination or, if Recipient files a Request for Reconsideration, discussed

below, then together with that Request. These will be Recipient’s only opportunities to do so.] [Insert

where applicable.]

Recipient also has the right to request to enter into a written repayment agreement with the

responsible Agency official(s) to repay the debt, including interest, penalties and administrative charges

determined by the Agency. If Recipient wishes to exercise this right, Recipient must do so within 60

days of the date of this Letter or, if Recipient files a Request for Reconsideration, discussed below, then

within 10 days of the Agency issuing to Recipient a decision on such Request (Reconsideration

Determination). These will be Recipient’s only opportunities to do so.

However, keep in mind that while the Agency may forego one or more of the aforementioned debt

collection activities pending the issuance of the Agency’s decision(s) on Recipient’s request(s), interest

and, should the debt become delinquent, penalty and administrative charges, will continue to accrue

unless and until the debt is paid in full.

[To request a waiver, Recipient must submit an explanation of why, under the pertinent facts and the

applicable legal authority, Recipient should be granted a waiver of all or part of the indebtedness.

Recipient must include any and all supporting evidence but may refer to evidence previously submitted

in lieu of resubmitting such evidence. This submission must be timely made to the Agency at the

address specified below for the filing of a Request for Reconsideration. The Agency will consider all

evidence submitted in a timely manner and, in due course, issue a Reconsideration Determination to

Recipient and, also, make any retroactive adjustments to the debt and refund any overpayment as may

be appropriate.] [Insert where applicable.]

To request to enter into a repayment agreement, Recipient must complete and return the Financial

Statement form [U.S. Department of Justice OBD-500 or OBD-500C for individual or corporate

recipients, respectively] [Insert appropriate form designation.], enclosed as Exhibit C [D if special

documents related to the debt are attached as discussed above.], together with a proposed repayment

schedule or, if Recipient is unable to pay the full amount of the debt, a settlement proposal in lieu of the

20 April 2021

schedule. This submission must be timely made to the Agency at the address specified below for filing a

Request for Reconsideration. The Agency will review all information and materials submitted in a timely

manner and any obtained from other sources (e.g., credit reports), and, in due course, issue a

Reconsideration Determination to Recipient.

Request for Reconsideration

Recipient has the right to request that the Agency reconsider this Audit Resolution Determination,

including providing Recipient with a review of any indebtedness established (Request for

Reconsideration). If Recipient wishes to exercise this right, Recipient must do so within 60 days of the

date of this Audit Resolution Determination. This will be Recipient’s only opportunity to do so.

However, keep in mind that while the Agency may forego one or more of the aforementioned debt

collection activities pending the issuance of the Agency’s Reconsideration Determination, interest and,

should the debt become delinquent, penalty and administrative charges will continue to accrue unless

and until the debt is paid in full. The exception would be if the Agency and Recipient previously entered

into a written repayment agreement, in which case that agreement would apply.

To request reconsideration, Recipient must file a Request for Reconsideration containing an explanation

of why, under the pertinent facts and the applicable legal authority, Recipient disagrees with this Audit

Resolution Determination. Recipient must include any and all supporting evidence but may refer to

evidence previously submitted in lieu of resubmitting such evidence. This submission must be timely

made to the address specified below. The Agency will consider all evidence submitted in a timely

manner and, in due course, issue to Recipient a Reconsideration Determination and, also, make any

retroactive adjustments to the debt and refund any overpayment as may be appropriate.

The original and one copy of a Request for Reconsideration must be timely filed with the Agency at:

US Department of Commerce

[Operating Unit]

1401 Constitution Avenue, NW, Room _____

Washington, DC 20230

Attn: [Agency Point of Contact]

Contemporaneously with filing such a Request, submit one copy thereof to:

US Department of Commerce

Office of the Inspector General

Principal Assistant IG for Audit and Evaluation

1401 Constitution Avenue, NW, Room 7721, MS H7721

Washington, DC 20230

Attn: [Name and Title of Appropriate OIG Official]

[Other Rights] [Add when applicable.]

20 April 2021

[Recipient’s spouse may claim his or her share of a joint income tax refund by filing Form 8379 with the

Internal Revenue Service provided that the spouse is not also delinquent on a debt to the United States.]

[Add for Individual Recipients.]

[If there are any rights and remedies available to Recipient under programmatic statutory or

regulatory authority under which the debt arose, state what they are and how they may be exercised.

Consult with legal counsel respecting such provisions.]

Civil and Criminal Penalties

If you knowingly make or provide any false or frivolous statements, representations or evidence, you

may be liable for civil penalties under the False Claims Act, as amended, 31 U.S.C. § 3729, et seq., or

other applicable law; and/or subject to criminal penalties under 18 U.S.C. §§ 286, 287, 1001 and 1002,

or other applicable law.

Agency Point of Contact

Please direct any questions regarding this matter and, also, any notice that Recipient has filed

bankruptcy, to _________, the Agency point of contact, at the address for filing a Request for

Reconsideration, above, or at (___) ___-____.

Sincerely,

___________________________________

[Name and Title of Responsible Official]

Enclosures

cc: _____________, Principal Assistant IG for Audit and Evaluation

20 April 2021

15. GRANTS ADMINISTRATION POLICIES AND REQUIREMENTS

At a minimum, operating units, recipients and subrecipients, as applicable, shall comply with the

policies and requirements outlined below. Additionally, the DOC ST&Cs and Section E, Chapter 2 of this

Manual outline additional government-wide requirements operating units, recipients and subrecipients

shall use in the administration of all DOC financial assistance awards.

A. Anti-Deficiency Act

The Anti-Deficiency Act (31 U.S.C. § 1341) prohibits making or authorizing the making of an

expenditure or obligation in excess of amounts available or involving the government in an obligation in

advance of an appropriation unless authorized by law. Because awarding financial assistance is an

obligation of Federal funds, financial assistance funds may not be awarded by DOC unless the funds are

currently available in a DOC appropriation or fund. For awards to be funded with amounts transferred

from another agency, the transfer agreement must be complete prior to approval of the award by DOC.

Questions concerning the Anti-Deficiency Act should be referred to the OGC General Law Division.

B. Bona Fide Needs Rule

The bona fide needs rule provides that an appropriation which is limited for obligation to a definite

period is available only for payment of expenses properly incurred during the period of availability or to

complete awards properly made within that period (31 U.S.C. § 1502(a)). This rule applies to all

Government activities carried out with appropriated funds. An agency’s “need” in the grant context is

to make a grant in furtherance of the goals Congress hoped to achieve when it enacted the grant-

making authority. In this context, the agency’s “need” is to make a grant, and the grantee’s use of grant

funds has no relevance in the assessment of agency needs. For that reason, a bona fide needs analysis

in the grant context focuses on whether the grant was made during the period of availability of the

appropriation charged and furthers the authorized purpose of program legislation. See B-289801,

December 30, 2002. The determining factor is that the grants, at the time of award, further the

objective of the grant legislation.

C. Conflicts of Interest

It is the policy of DOC to maintain high standards of conduct to prevent real or apparent conflicts of

interest in connection with awards. A conflict of interest exists when a person participates in a matter

which is likely to have a direct and predictable effect on his or her personal or financial interests. A

conflict also exists where there is an appearance that a person’s objectivity in performing his or her

responsibilities is impaired. An appearance of impairment of objectivity could result from an

organizational conflict where, because of other activities or relationships with other persons or entities,

a person is unable or potentially unable to render impartial assistance or advice to the government. A

conflict of interest could also result from non-financial gain to the individual, such as benefit to

reputation or prestige in a professional field. Conflicts could inadvertently occur as program officials

carry out their responsibilities during the evaluation and selection process, during the review process,

and as recipients carry out their responsibilities under awards. Conflicts of interest should be avoided,

but if they are discovered, they should promptly be resolved through disqualification, divestiture, waiver

or other appropriate measures. Several requirements are applicable to the activities of individuals and

organizations in the context of financial assistance.

20 April 2021

1. Federal Employees

a. Under a criminal statute (18 U.S.C. § 208) and Government-wide Standards of Conduct (5

CFR Part 2635), a Federal employee may not participate in an official capacity in a matter which is

likely to have a direct and predictable effect on his or her financial interests. An employee also

should not participate in the evaluation or selection process in any circumstance where his/her

participation would create the appearance of loss of impartiality, including situations in which one

of the parties is, or is represented by, a member of the employee’s household, the employee’s

relative or a person with whom the employee has or is seeking business relations. Any situation

which creates an actual conflict or the appearance of a conflict should be brought to the attention of

the Program Officer for appropriate action. Depending on the circumstances, resolution may consist

of disqualification, divestiture, waiver, or other appropriate measures.

b. In addition to these restrictions, Federal employees should not participate in any activities

that would result in providing any person or organization a competitive advantage. For example, an

employee, other than as part of his or her official duties, should not assist an applicant for a

competitive financial assistance program with the preparation of a proposal to be submitted to the

employee’s agency. Additionally, an employee, other than as part of his or her official duties, may

not submit applications for financial assistance to DOC on behalf of any other person or entity.

2. Review Panel Members. In order to ensure the integrity of the application review process, it is

essential that reviewers be free from actual or apparent conflicts of interest or appearance of

impairment of objectivity. In order to identify the existence of a conflict of interest, program officials

must provide each reviewer with a certification form which sets forth standards for determining the

existence of a conflict of interest and requires the reviewer to notify the Program Officer of any

potential or actual conflicts. When a conflict or potential conflict of interest is identified, it must be

resolved by the Program Officer through appropriate action, such as disqualification, divestiture, or

waiver.

D. Consulting Services

Grants and cooperative agreements are not to be used as legal instruments for consultant services

for the purpose of performing in-house organizational studies or other studies for internal government

use unless allowed by statute.

E. Coordination with DOC and Other Federal Agencies

In order to address duplication of effort in work under DOC awards, projects will be coordinated as

appropriate with other Federal agency programs, as well as with other operating units within DOC.

Appropriate coordination shall be conducted for any project whose scope of work overlaps, relates to,

or duplicates the program mission of another Federal program before an award is approved for funding.

The DOC supports interagency programs to provide support for research and other programs. It is,

therefore, sometimes necessary to accommodate the requirements of partner agencies in awards. DOC

will be as flexible as possible in consideration of partner agency needs for application requirements,

review and selection procedures and final award notifications. As long as DOC policies and procedures

are followed, the administration of interagency programs involving DOC may include requirement

elements from other Federal agencies. In cases where funds are transferred from other Federal

20 April 2021

agencies, documentation of agreements, including but not limited to, any agreements pursuant to the

Economy Act or Memoranda of Understanding/Agreement, must be included in award files.

F. DOC Forms

DOC grants administration forms approved for use with grants and cooperative agreements are

listed below. Operating units must ensure that these are the forms used for their prescribed purposes.

These forms are in addition to any government-wide Standard Forms (SF).

1. Form CD-450 - Financial Assistance Award

2. Form CD-451 - Amendment to Financial Assistance Award

3. Form CD-511 - Certifications Regarding Lobbying

4. Form CD-512 - Certification Regarding Lobbying – Lower Tier Transactions

G. Freedom of Information Act (FOIA)

The Freedom of Information Act (FOIA) (5 U.S.C. § 552) generally provides that any person has a

right of access to Federal agency records, except to the extent that such records (or portions thereof)

are protected from disclosure by exemptions. The DOC regulations implementing the FOIA are found at

Subpart A of 15 CFR Part 4 (Disclosure of Government Information) which sets forth rules for DOC and

operating units to make requested materials, information, and records publicly available under FOIA.

Unless prohibited by law and to the extent permitted under the FOIA, contents of applications and

proposals submitted by successful applicants may be released in response to FOIA requests. In addition,

2 CFR § 200.315 (Intangible property) requires that 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 will be made available to the public through the procedures

established under the FOIA.

H. Management and Institutional Grant Reviews

1. Management Reviews. OAM will conduct reviews to evaluate the internal grants administration

policies and procedures of the operating units, including field or remote locations. NIST, NOAA, and EDA

grants operating units will be evaluated once every three years. More frequent reviews will be

scheduled when justified by operational issues. At a minimum, the review team should include

members from the OGC as well as knowledgeable representatives from operating units other than the

unit under review. The scope of the review will include but not be limited to compliance with applicable

public laws, regulations, OMB circulars, this Manual, and internal grants administration policies of the

operating unit. The review team’s report will be sent to the operating unit for comment prior to

publication.

2. Reviews of Institutional Grant Awards. Each financial assistance program that has been

authorized by the Grants Officer to make institutional awards must establish procedures in consultation

with the Grants Officer for an independent review and evaluation of the program and/or the

institutional awards, the performance of the institutional award recipients, and the effectiveness of the

20 April 2021

program and of the recipients in meeting the objectives and goals of the program. At least once every

five years a review must be conducted and the results of the review, including any findings and

recommendations, shall be submitted to the Grants Officer in a timely manner, with a copy of the report

provided to OAM, as appropriate.

I. Privacy Act

The Privacy Act (PA) (5 U.S.C. § 552a) provides an individual with a legal right to access records

about herself or himself (subject to exemptions) and the right to request amendment of any record in

that individual’s PA file that is inaccurate, irrelevant, untimely, or incomplete. The PA also prohibits the

unauthorized disclosure of PA protected information. The DOC’s regulations implementing the PA are

found at Subpart B of 15 CFR Part 4 (Disclosure of Government Information).

J. Recipient Name Change

A recipient organization may decide to change its legal name without changing any other aspect of

the award (e.g., there are no asset or ownership changes). In this instance, the Grants Officer should

direct the recipient to provide documentation of the name change, such as a copy of a certificate from a

Secretary of State verifying the change for an incorporated party. If the name change is implemented by

common law rather than by legal action, the Grants Officer may instead accept an attestation by the

Chief Executive Officer, President, or equivalent official of the organization, stating that the change

occurred. The Grants Officer will amend the award to reflect the new name.

K. Requests for Prior Approval

When a recipient is required to obtain approval before taking certain actions with respect to a grant

or cooperative agreement, the Grants Office shall provide a decision in writing to the recipient within 30

days of receipt by the awarding agency. If a decision cannot be made within 30 days, the office holding

the request must acknowledge receipt and inform the recipient in writing within 30 days when a

decision can be expected.

L. Statutory Authority

Each financial assistance proposal must be awarded under the proper authorizing statute. The

Federal Grant and Cooperative Agreement Act (31 U.S.C. §§ 6301-6308) does not provide legislative

authority to fund financial assistance awards. It merely provides the basis for selecting the appropriate

funding instrument.

M. Transfer of Award

In certain circumstances, the Program Officer, Grants Officer and the recipient may agree that it

would be in the best interests of the government and the recipient for an award to be transferred by

DOC to a replacement recipient.

1. When the two organizations, the Program Officer and the Grants Officer agree that it is in the

best interests of the Federal Government and the intended beneficiaries of the award to allow the

transfer, the Grants Officer will amend the award to transfer it to the new recipient organization. In

such cases, the Program Officer must submit a request to the Grants Officer to change recipients. The

request shall include documentation attesting to the original recipient’s and proposed replacement

recipient’s consent to the proposed transfer. Such documentation should include a written agreement

20 April 2021

between the original recipient and the proposed replacement recipient executed by authorized

representatives of both parties. In this instance, the organization relinquishing the award will be liable

for all programmatic activities and all funds expended under the award prior to the effective date of the

transfer. The relinquishing organization will be responsible for all closeout activities, including having an

audit performed, if required, for the award prior to the effective date of the transfer. The organization

to which the award is transferred must submit an application (if appropriate) which includes a proposal

and detailed budget narrative (a maximum of an original and two copies may be required by the Federal

awarding agency). The following forms must also be submitted, as applicable: Forms SF-424, SF-424A,

SF-424B, SF-424C, SF-424D, CD-511, SF-LLL, or any other approved program specific forms. The Program

Officer will review all documents and make a recommendation as to the applicant’s adequacy to meet

program requirements which will be forwarded to the Grants Office along with the request. This review

will be the same as the review of any new application, including a responsibility check on the applicant,

unless that function is performed by the Grants Office. The language in the amendment must clearly

delineate the responsibilities of both parties to the transfer. The Grants Officer will consult with the

FALD on the legal merits of the proposed transfer.

2. Novation Agreement. A novation occurs when one organization takes over all of the liabilities

and responsibilities of another organization. This might occur as a result of a merger, one organization

buying another, an organization going out of business and entering into an agreement with another

organization to take over its business, or a variety of other reasons.

a. When an organization seeks to transfer an award to another organization as a result of a

novation agreement, the two organizations should submit a proposed novation agreement to the

Grants Officer, signed by the CEOs, Presidents, or equivalent fiduciary officers of the two

organizations. The novation agreement should state that all rights, duties and obligations of the

award are transferred without further claim and that the new recipient agrees to accept them.

Furthermore, the new recipient must meet statutory and regulatory eligibility requirements. In the

case of successor-in-interest organizations, the recipient shall submit relevant documentation

reflecting the relationship between the recipient and the successor organization.

b. The Grants Officer will consult with the FALD on the legal merits of the proposed novation.

If the novation is determined to be in order, the Grants Officer will request that the proposed new

recipient submit an application and an amended proposal (if appropriate) to effect the change in

award recipient. The application must include an original proposal and detailed budget narrative (as

well as two copies if required by the Federal awarding agency). The following forms must be

submitted, as applicable: Forms SF-424, SF-424A, SF-424B, SF-424C, SF-424D, CD-511, SF-LLL, and

any other approved program specific forms. The Grants Officer will then obtain a review and

written recommendation regarding the proposed novation from the Program Officer as to the

programmatic efficacy of the proposed agreement. The Program Officer should examine whether

the scope of work has changed or if there are other issues arising that would put the initial

competitive selection in jeopardy because of differences between the original and the new recipient

and review any related budgetary changes. The Grants Officer must make a responsibility

determination regarding the new recipient. If the Grants Officer then determines that the award

should continue, he/she will issue an amendment to the award to effect the transfer to the

subsuming organization.

20 April 2021

N. Transfer of Funds

When other agencies transfer funds to DOC for financial assistance programs, DOC must generally

comply with legislative requirements imposed on the transferred funds (e.g., restrictions contained in a

transferring agency's appropriation act and/or authorization act). If a statute places specific

requirements on funds, those requirements generally remain with the funds upon transfer. When there

is a specific limitation or requirement placed on the funds transferred by law of such transferring

agency, the DOC award may have to include that limitation or requirement along with DOC terms and

conditions, as appropriate. It is also possible that DOC may have legislation or requirements applicable

to funds transferred to it and such requirements would need to be noted in the specific award

conditions, as appropriate.

[Note: When DOC provides Federal funds to another Federal agency that is administering a

collaborative project with the Department, the agreement governing that transfer of funds must

stipulate that DOC funds shall not be used to pay for management fees in excess of costs or profits in a

financial assistance award, unless statutorily authorized. See also Chapter 9 of this Manual.]

O. Waivers and Deviations

Any request for waivers and/or deviations from the requirements of this Manual must be submitted

in writing to the Director, OAM, by the Head of Operating Unit or designee. The request must include a

full explanation of the reason for the request and justification for the deviation or waiver. OAM will

review the request, coordinate its review with OGC and other appropriate offices, and provide a

response in accordance with Chapter 4 of this Manual. Requests for waivers and deviations from the

requirements will be approved only in extraordinary circumstances and when such approval will be in

the best interest of the Federal Government. Proposed deviations from DOC regulations (e.g., uniform

administrative requirements) may require that OAM seek prior approval from OMB.

20 April 2021

16. CONSTRUCTION AWARDS

A. Purpose

This chapter applies when activities under a DOC award involve construction, as described in Section

C. below. Construction awards are primarily made by three operating units within DOC: EDA, NOAA and

NIST. This chapter describes the procedures for compliance, reporting, record-keeping, and

administrative requirements that generally apply to DOC construction awards. Contact the specific

operating unit for more operating unit-specific information and also see Appendix A (Applicable

Regulations, OMB Circulars and Agency-specific Guidance) to this chapter for applicable authorities and

for specific operating unit requirements. Also, when an appropriations statute or other direct statutory

authority requires an operating unit to provide Federal assistance for a specific project or to a specific

organization or individual, FALD should be consulted to determine which provisions of this chapter

apply.

B. Authority

Construction activity is allowable only when program legislation includes specific authority for

construction and/or when the DOC operating unit specifically authorizes construction activity.

C. Scope of Chapter

1. Construction. This chapter applies to an award in which the primary purpose of the project or

program is construction, such as the construction of new buildings, completion of shell space in existing

buildings, renovation or rehabilitation of existing buildings, and construction or development of real

property infrastructure improvements (e.g., site preparation, utilities, streets, curbs, sidewalks, parking

lots, other streetscaping improvements, etc.).

2. Construction vs. Alterations. An award is generally considered a construction award when the

primary purpose of the DOC financial assistance is to support construction activities, as defined in this

chapter. In contrast, alteration activities incidental to the primary purpose of an award are generally

not considered to constitute a construction award under this chapter. For example, if the primary

purpose of an award is to allow a recipient to conduct educational or business seminars, the renovation

of an educational exhibit or staging area would not be considered construction under this chapter.

D. Policy

1. Grant Recipients as Trustees and the Federal Interest in Grant-Acquired Property. Property that

is acquired or improved, in whole or in part, with Federal assistance is held in trust by the recipient for

the purpose(s) for which the award was made and for the estimated useful life of the project, during

which period the DOC operating unit retains an undivided equitable reversionary interest in the

property (the Federal Interest). Under the United States Constitution (Article I, Section 8, Clause 1),

Congress has the power to appropriate Federal funds. Incident to this power is the right “to further

broad policy objectives by conditioning receipt of those Federal moneys upon compliance by the

recipient with Federal statutory and administrative directives.” South Dakota v. Dole, 483 U.S. 203, 207,

quoting Fullilove v. Klutznick, 448 U.S. 448, 474 (1980). See also Article IV, Section 3, Clause 2, regarding

Congress' power to make rules regarding property of the United States. The requirement that property

purchased or improved with Federal funds continue to be used for the original statutory purpose for

20 April 2021

which it was acquired is embodied in the Uniform Guidance at 2 CFR §§ 200.310 (Insurance coverage) -

.316 (Property Standards).

The U.S. Government Accountability Office explains the “Federal Interest” concept in Principles of

Federal Appropriations Law, 3d Ed., Vol. II, Ch. 10, Pt. D (2006):

[A] grantee holds grant funds, and property purchased with those funds, in the capacity of a trustee.

For example, in Joliet-Will, 847 F.2d at 432 [In re Joliet-Will County Community Action Agency, 847

F.2d 430 (7th Cir.1988)], the court held that the grantee was essentially “a trustee, custodian, or

other intermediary, who . . . is merely an agent for the disbursal of funds belonging to another,” and

that the grantee's ‘ownership’ was nominal, like that of a trustee. The trust concept finds support in

an early Supreme Court decision, Stearns v. Minnesota, 179 U.S. 223 (1900), a land grant case in

which the Court discussed the grant in trust terms.

Accordingly, the recipient holds grant funds and DOC-financed property in trust to serve the purpose of

the operating unit’s program for which the Financial Assistance Award was made. The recipient's

obligation to the Federal Government continues for the estimated useful life of the project, as

determined by the operating unit. If it is determined that a recipient is failing to meet this obligation,

the operating unit may assert its equitable reversionary interest in the project. However, the operating

unit’s non-assertion of its interest does not constitute a waiver thereof.

2. Eminent Domain. In making a discretionary award for a construction project, the operating unit

will consider the policy on eminent domain set out in Executive Order 13406, (Protecting the

Property Rights of the American People, June 28, 2006). As appropriate, the terms and

conditions of the award will include appropriate provisions to ensure that the recipient agrees:

a. Not to use any power of eminent domain available to the recipient (including the

commencement of eminent domain proceedings) for use in connection with the project for the

purpose of advancing the economic interests of private parties;

b. Not to accept title to land, easements, or other interest in land acquired by the use of any

power of eminent domain for use in connection with the project for such purposes; and

c. Any use of the power of eminent domain to acquire land, easements or interests in land,

whether by the recipient or any other entity that has the power of eminent domain, in connection

with the project without prior written consent of the operating unit constitutes an unauthorized

activity and/or use of funds under the award, and subjects the recipient to appropriate enforcement

action by the Grants Officer, including but not limited to the disallowance of award costs and the

termination of an award.

E. General Requirements

The following sections of this chapter contain requirements that are applicable to construction

awards that originate in all Department operating units. The Appendices contain requirements specific

to NOAA and EDA construction awards.

20 April 2021

1. Recipient Responsibilities.

a. The recipient is responsible for complying with all Federal laws and regulations,

Departmental policies, Executive Orders, and Office of Management and Budget (OMB) Circulars

that are referenced in the Terms and Conditions, each as may be amended. These may include

environmental requirements, applicable Federal cost principles and administrative, audit,

programmatic, financial, and property management requirements. The recipient is responsible for

supervising the design, bidding, construction, and operation of construction projects in compliance

with the terms and conditions of an award, including requirements incorporated by reference into

an award.

b. The operating unit will assist the recipient by providing information and guidance on the

Federal requirements for each award, such as the information contained in this chapter, the

references and forms listed in the Appendix (Section I), and direct guidance and assistance provided

by operating unit project managers.

c. The Financial Assistance Award. The recipient should pay particular attention to the

following portions of the Financial Assistance Award:

(1) The scope and description of the project as set forth in the award documents;

(2) All Federal requirements specifically listed or incorporated into the award that describe

applicable Federal administrative requirements. These publications provide critical information on

procurement, record-keeping, and cost principles, as well as other important administrative issues.

Reprints of critical documents are available as indicated in the Appendix (Section I);

(3) The specific standard terms and conditions of the Financial Assistance Award applicable to

the construction project; and

(4) Any specific award conditions, which may contain conditions that must be satisfied prior to

advertisement for bids, start of construction, disbursement of grant funds, or other critical events,

as well as conditions that extend for the duration of the estimated useful life of the project.

Failure of a recipient to satisfy the terms and condition of an award may result in

appropriate enforcement action by the Grants Officer, including but not limited to the

disallowance of costs, or suspension or termination of the award and recovery of federal

funds. In addition, such failure may have a negative impact on the recipient’s ability to

receive future funding from the Department. Special attention should be paid to the

project development time schedule, which may only be extended as a result of a written

request from the recipient for an amendment to the award and a corresponding written

approval from the operating unit. The disbursement of grant funds for project activities

(not including award closeout activities) is not permitted when a project has exceeded the

time schedule unless the operating unit has given written approval for a time schedule

extension.

20 April 2021

2. Operating Unit’s Responsibilities.

a. Pre-award Requirements. In preparing documentation for a financial assistance award for a

construction project, the Program Officer should be familiar with the following requirements:

(1) Forms. Unless the operating unit uses other OMB-approved forms for construction,

operating units shall use Form SF-424 (Application for Federal Assistance), Form SF-424C (Budget

Information – Construction Programs), and Form SF-424D, (Assurances – Construction Programs),

when the primary purpose of a project or program is construction or real property development.

(2) Construction Terms. For EDA construction awards, the below terms in subparagraphs (2)(a)

– (h) or substantively similar terms shall be included in all awards. For construction awards of other

DOC operating units, the below terms in subparagraphs (2)(a) – (h) or substantively similar terms

shall also be required, except that the Grants Officer may provide an alternative means of providing

public notice of the Federal Interest under subparagraph 2(b) below or, as warranted by the

circumstances of a particular award, may forego the filing of a public notice of the Federal Interest

but this does not alter the trust relationship by which the recipient holds title (see 2 CFR § 200.316

(Property trust relationship)). In this connection, requiring a recipient to provide public notice of the

Federal Interest in DOC construction projects is a highly encouraged practice and should be required

by the operating unit Grants Officer whenever feasible considering the totality of circumstances

surrounding a specific construction project or group of similarly situated construction projects.

(a) Maintenance. The recipient agrees that, for the estimated useful life of the facility funded

with this award, the project will be properly and efficiently administered, operated, and maintained

for the purpose authorized by this award and in accordance with the terms, conditions,

requirements, and provisions of the award. If the [operating unit] determines at any time during the

estimated useful life of the project, that the project and any project property is not being properly

and efficiently administered, operated, and maintained, the [operating unit] shall have the right to

terminate this award for cause and pursue any other remedies allowed by law. See 2 CFR § 200.311

(Real property).

(b) Notice of Federal Interest. The recipient shall execute a covenant, property management

agreement, mortgage or other statement of the Federal Interest in real property acquired or

improved, in whole or in part, under a DOC financial assistance award, acceptable in form and

substance to the operating unit, which must be placed of record in accordance with local law, with

continuances (for fixture filings) and amendments filed as appropriate. The recipient must provide

the operating unit with a written statement from a licensed attorney in the jurisdiction where the

property is located certifying that the covenant, mortgage or other statement of the Federal Interest

has been properly executed and duly recorded, as required under the award and in accordance with

local law. The attorney’s statement, along with a copy of the instrument reflecting the recordation

of the Federal Interest, shall be returned to the Grants Officer. The recipient may not dispose of,

modify the use of, or change the terms of the real property title, or other interest in the project site

and facilities without permission and instructions from the operating unit. No funds under this

award shall be released until the recipient has complied with this provision, unless other

arrangements satisfactory to the operating unit are made.

20 April 2021

including lower tier subrecipients or subcontractors, to comply with all applicable Federal, state, and

local laws and regulations.

(d) Energy Efficiency. The recipient shall apply, where feasible, sustainable, and energy

efficient, design principles for the purpose of reducing pollution and energy costs and optimizing

lifecycle costs associated with the construction.

(e) Signs. The recipient is responsible for constructing, erecting, and maintaining in good

condition throughout the construction period a sign(s) satisfactory to the operating unit that

identifies the project and indicates that the project is federally funded. The operating unit also may

require that the recipient maintain a permanent plaque or sign at the project site with the same or

similar information.

(f) Land, Easements, and Rights of Way. The recipient must disclose all pre-existing or

contemplated encumbrances to the operating unit as they pertain to real property that will be

acquired or contributed by a recipient or subrecipient pursuant to a DOC construction award. The

operating unit will not accept any encumbrance that interferes with the construction, intended use,

operation, or maintenance of, or the Federal Interest in, the project during its estimated useful life.

Unless otherwise provided for in the award, prior to grant of the award and commencement of

construction, or when requested by the operating unit, the recipient must furnish evidence,

satisfactory in form and substance to the operating unit, that title to real property is vested in the

recipient, and that it has obtained any rights-of-way, easements, State and local government

permits, long-term leases, or other property interests. FALD should be consulted to the extent that

a Grants Officer or Operating Unit has questions relative to a recipient’s title interest in project

property, whether a recipient has secured the requisite licenses, permits or other property interests

for a project, or with respect to the nature and impact of any pre-existing or competing

encumbrances to project property.

(g) Relocation Assistance. The provisions of the Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970, as amended, (Pub. L. No. 91-646; 42 U.S.C. § 4601 et seq.),

are applicable to each recipient of assistance from an operating unit. This Act provides assistance to

persons, businesses, or farm operations affected by the acquisition, rehabilitation or demolition of

real property acquired for a project financed wholly or in part with Federal assistance funds. It also

requires compliance with specific guidelines pertaining to reimbursable costs incidental to such land

acquisition.

(h) Tribal Employment Rights Ordinances. In accordance with Departmental policy, all

operating units must recognize Tribal Employment Rights Ordinances (TEROs), which may provide

for preferences in contracting and employment, in connection with its financial assistance awards.

Tribal ordinances requiring preference in contracting, hiring, and firing and the payment of a TERO

fee are allowable provisions under Federal awards and should be incorporated by the operating unit

under its grants and contracts with American Indian and Alaska Native tribal governments. The

payment of the TERO fee, which supports the tribal employment rights office to administer the

preferences, should generally be allowable as an expense that is “necessary and reasonable for

proper and efficient performance and administration” of an award, as provided under the applicable

cost principles set out in 2 CFR Part 200, Subpart E.

20 April 2021

b. Post-award Requirements. The Grants Officer, in consultation with the Federal Program

Officer, should ensure that construction awards contain appropriate post-award terms and

conditions to help ensure the successful completion of the project by the recipient, as well as the

protection and maximization of the DOC investment in the recipient’s project. In this connection,

below is a non-exhaustive list of post-award requirements for a Grants Officer and a Federal

Program Officer to consider in developing appropriate terms and conditions for a construction

award.

(1) Recipient Documentation. At a minimum, the recipient’s records must fully disclose: (a) all

project expenditures, (b) procurement actions, (c) compliance with the Terms and Conditions of the

Financial Assistance Award, and (d) contractor compliance with applicable Federal requirements,

and (e) such other records as identified in 2 C.F.R § 200.334 (Retention Requirements for Records),

or in the terms and conditions of an award.

The operating unit needs to review documentation submitted by the recipient, ensure that all

such documentation is complete, accurate and complies with all applicable award requirements,

and, in consultation with the Grants Officer, ensure that any necessary or appropriate follow-up

actions are taken.

(2) Reporting of Project Progress. Progress reports shall be due from the recipient on a regular

basis and shall, at minimum, contain the following information:

(a) A comparison of actual accomplishments to the schedule established in the award;

(b) Reasons for delays in those cases where the schedule approved by the operating unit was

not met;

funding, or cost of the project;

(d) All change orders issued up to the date of the report and not previously reported to the

operating unit; and

(e) Other pertinent information including, when appropriate, an analysis and explanation of the

cost overruns or high unit costs.

In addition, between the required reporting dates, events may occur, such as problems, delays,

or adverse conditions, that will materially affect the ability of the recipient to attain program

objectives, prevent time schedules and goals from being met, or preclude the attainment of project

work units by established time periods. The recipient shall be required to inform the operating unit

as soon as possible of any event which has or that is expected to have a material impact on the

project, including any favorable developments that enable the recipient to meet time schedules and

goals sooner than anticipated or produce more work than originally projected. The recipient must

notify the operating unit of such events in the most expeditious way possible and then, if the

original notification was not in writing, provide the operating unit with written notification, including

a statement of the event or issue, a statement of the course of action contemplated to resolve the

20 April 2021

matter, and any Federal assistance needed to resolve the situation. The operating unit will review

and respond appropriately to documentation disclosing these events.

(3) Pre-Construction Documentation. The operating unit reviews documentation regarding the

following:

(a) Environmental Compliance. The operating unit must ensure that environmental project

reviews are conducted in accordance with the requirements of the National Environmental Policy

Act of 1969, as amended (Pub. L. No. 91-190; 42 U.S.C. § 4321 et seq., as implemented under 40 CFR

chapter V) (NEPA), when the award activities remain subject to Federal authority and control, and all

other Federal environmental statutes, regulations and Executive Orders, as listed in the Terms and

Conditions to the award. These authorities include the implementing regulations of NEPA, which

require the operating units to provide public notice of the availability of project-specific

environmental documents, such as environmental impact statements, environmental assessments,

findings of no significant impact, and records of decision, as specified in 40 CFR § 1506.6(b).

(b) Civil Rights Compliance. Discrimination by a grant recipient is prohibited in accordance with

the following authorities:

(i) Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000d et seq.) and the

Department’s implementing regulations at 15 C.F.R Part 8;

(ii) 42 U.S.C. § 3123 and 42 U.S.C. § 6709 (for EDA recipients), and the Department’s

implementing regulations at 15 CFR §§ 8.7-8.15;

(iii) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794) and the

Department’s implementing regulations at 15 CFR Part 8b. For purposes of complying with the

accessibility standards set forth in 15 CFR § 8b.18(c), non-federal entities must adhere to the

regulations, published by the U.S. Department of Justice, implementing Title II of the Americans with

Disabilities Act (ADA) (28 CFR Part 35; 75 FR 56164, as amended by 76 FR 13285) and Title III of the

ADA (28 CFR Part 36; 75 FR 56164, as amended by 76 FR 13286). The revised regulations adopted

new enforceable accessibility standards called the “2010 ADA Standards for Accessible Design”

(2010 Standards), which replace and supersede the former Uniform Federal Accessibility Standards

for new construction and alteration projects. See also Section K.01.a.4. of the DOC Financial

Assistance Standard Terms and Conditions (December 26, 2014) and Chapter 15.C.3. of this Manual;

(iv) The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.) and the

Department’s implementing regulations at 15 CFR Part 20;

(v) The Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) prohibiting

discrimination on the basis of disability under programs, activities, and services provided or made

available by State and local governments or instrumentalities or agencies thereto, as well as public

or private entities that provide public transportation; and

(vi) Other non-discrimination Federal statutes, regulations, and Executive Orders, as applicable.

20 April 2021

(4) Project Management Conference. Shortly after approval of the award, the operating unit

may contact the recipient to arrange a project management conference. The purpose of the project

management conference is to explain to the recipient its post-approval responsibilities for

administration of the award, including its responsibilities with respect to the Terms and Conditions

of the award and applicable Federal requirements. Whenever practical, the project management

conference should be held where appropriate operating unit regional office personnel will be

available. The recipient’s authorized representative, architect/engineer, attorney, and possibly the

recipient’s financial representative should attend.

(5) Architect/Engineer Agreement.

(a) The recipient’s architect/engineer agreement shall provide for all services required by the

recipient for the design and engineering phases of the project. Appropriate standards, guidance, or

forms developed by professional organizations, such as the American Consulting Engineers Council

(ACEC), American Society of Civil Engineers (ASCE), National Society of Professional Engineers

(NSPE), and/or the American Institute of Architects (AIA) may be used where the recipient does not

have standard procurement documents.

(b) The recipient must select the architect/engineer in accordance with the procurement

standards set forth in 2 CFR §§ 200.317 (Procurements by states) through 200.327

(Contract provisions). The “cost-plus-percentage-of-cost” and “percentage-of-cost” methods of

contracting are specifically prohibited. See 2 CFR § 200.324(d).

execution of the project, including consultations, surveys, soil investigations, supervision, travel, “as-

built” or record drawings, arrow diagram (CPM/PERT) where applicable, and incidental costs.

Regardless of who furnishes the construction inspector, the architect/engineer shall be held

responsible for making sufficient visits to the project site to determine if the work is proceeding in

accordance with the approved plans and specifications.

(d) All architect/engineer contracts awarded by the recipient shall include a provision to the

effect that the recipient, the operating unit, the Comptroller General of the United States, the

Inspector General of the Department of Commerce (OIG), or any of their duly authorized

representatives, shall have access to any paper or electronic documents, books, correspondence,

and records of the architect/engineer that are pertinent to the award in order to verify the

recipient’s compliance with award requirements. See also 2 CFR § 200.327, (Contract provisions) for

a listing of the required provisions for contracts awarded by recipients pursuant to a DOC financial

assistance award (including construction awards).

(6) Early Construction Starts. In order for project costs to be eligible for reimbursement by the

operating unit, the operating unit must determine that all contracts necessary for design and

construction of the project facilities have been awarded in compliance with the Terms and

Conditions of the award. If construction commences prior to the operating unit’s determination,

the recipient proceeds at its own risk and at the risk of not being reimbursed by DOC for such

activities, unless and until the operating unit’s review and concurrence.

20 April 2021

(7) Requirements during construction.

(a) At a minimum, during construction, the recipient is responsible for:

(i) Ensuring project completion in accordance with approved plans and specifications;

(ii) Monitoring project progress and reporting progress to the operating unit;

(iii) Providing for required construction permits and adequate construction inspection;

(iv) Promptly paying costs incurred for the project purposes, including appropriate bonding

costs and insurance premiums;

(v) Monitoring contractors’ compliance with Federal, State, and local requirements; and

(vi) Constructing and maintaining in good condition throughout the construction period, of a

sign or signs, at the project site in a conspicuous place indicating that the Federal Government is

participating in the project.

(8) Scheduling Inspection for Final Acceptance. The recipient will schedule a final inspection

when all construction has been completed, the architect/engineer has conducted a final inspection,

and any deficiencies have been corrected. Representatives of the recipient, the architect/engineer,

and the contractor(s) will make the final inspection. The operating unit must be given advance

notice of the final inspection so that a representative of the operating unit may participate.

(9) Change Orders.

(a) The recipient shall submit all contract change orders for review and for approval by the

operating unit even if the operating unit is not participating in any costs associated with the change

or if the contract price is to be reduced. Necessary supporting statements, estimates, specifications,

and plans should be attached. Absent express legal authority, the operating unit may not approve

change orders that change the purpose and intent (the scope) of the project. Change orders that

minimally or incidentally increase the cost of the project, but do not change the project scope, may

be approved by the operating unit, provided that either:

(i) The recipient has agreed in writing to fund the additional cost, in which case all work to

effect the change order will be an ineligible project cost and no federal funds will be used to pay for

it; or

(ii) There are sufficient funds remaining in the award budget to cover the change order without

jeopardizing the completion of the project.

(b) Unit prices are often used as a basis on which to make a contract award. In addition, they

may be used for establishing actual costs where actual quantities differ from estimated quantities.

Variations will normally require a change order to the contract whether or not a change in unit price

is involved. Any increase in quantity that will result in an overall project cost overrun will require a

change order to the contract. Any change to a unit price shown in the contract documents will

20 April 2021

100

require a change order to the contract. A change order may also be required at project completion

to establish final quantities for unit price contracts.

(10) Specific Requirements for Contractors and Subcontractors. The recipient is responsible for

ensuring that it includes applicable DOC compliance provisions, as contained in the Terms and

Conditions of the award, including the contract provisions required by 2 CFR§ 200.327 (Contract

provisions), in all contracts let by the recipient under a DOC construction award. The recipient is

also responsible for ensuring that, in turn, each contractor under a DOC construction awards

includes the applicable DOC compliance provisions in all subcontracts awarded under the prime

contract. Additionally, the recipient must ensure that each contractor and subcontractor agrees to

comply with all applicable Federal, state, and local requirements pertaining to the project.

(11) Services Performed by the Recipient’s Own Forces.

(a) The recipient may have a portion or all of the design, construction, inspection, legal services,

or other work or services in connection with the project performed by personnel who are employed

by the recipient either full-time or part-time (“in-house” or “force account” construction). If the

recipient elects to use force account labor, the operating unit will furnish specific guidance to the

recipient that must be followed for the cost for such work to be eligible for reimbursement from the

operating unit.

(b) The operating unit must review and approve the recipient’s plan if this method is to be

elected by the recipient.

Operating Units to perform the monitoring, in-house construction is strongly discouraged.

Generally, the in-house method of construction may only be approved if:

(i) The recipient has a special skill required for the construction (e.g., construction of unique

Indian structure); or

(ii) Substantial cost savings can be demonstrated; or

(iii) The Operating Unit Engineer/Construction Manager or Project Officer is satisfied that the

recipient has made all reasonable efforts to obtain a contractor, but has failed to do so because of

uncontrollable factors (such as the remoteness of the site combined with a small contract or an

overabundance of construction work in the project area); or

(iv) It has been determined by the Operating Unit that special circumstances require its use to

successfully complete the project.

(12) Contracting Standards.

(a) In General.

(i) States. When procuring property and services under a Federal award, a State must follow

the same policies and procedures it uses for procurements from its non-Federal funds. A State must

20 April 2021

101

comply with 2 CFR § 200.323 (Procurement of recovered materials) and ensure that every purchase

order or other contract includes any clauses required by 2 CFR § 200.327 (Contract provisions). See

2 CFR § 200.317 (Procurements by states).

(ii) Other Non-Federal Entities. All other non-Federal entities, including subrecipients of a

State, must follow 2 CFR §§200.318 (General procurement standards) through 200.327 (Contract

provisions), which are outlined below.

(b) General Procurement Standards. The recipient shall adhere to the procurement standards

contained in 2 CFR § 200.318 (General procurement standards). In particular, the recipient shall

make awards only to responsible contractors that possess the ability to perform successfully under

the terms and conditions of a proposed procurement. Additionally, the recipient must maintain a

written code of conduct, which shall govern the actions individuals, such as any officer, employee or

member of the board of directors or other governing board of the recipient, including any other

parties that advise, approve, recommend or otherwise participate in the business decisions of the

recipient, such as agents, advisors, consultants, attorneys, accountants or shareholders. This also

includes immediate family, significant others, partners, and other persons directly connected to

such persons by law or through a business arrangement.

and open competition consistent with the standards of 2 CFR § 200.319 (Competition). The non-

Federal entity must conduct procurements in a manner that prohibits the use of statutorily or

administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or

proposals, except in those cases where applicable Federal statutes expressly mandate or encourage

geographic preference. The non-Federal entity must have written procedures for procurement

transactions. The non-Federal entity must ensure that all prequalified lists of persons, firms, or

products which are used in acquiring goods and services are current and include enough qualified

sources to ensure maximum open and free competition. Also, the non-Federal entity must not

preclude potential bidders from qualifying during the solicitation period.

(d) Methods of Procurement. A non-federal entity must adhere to the methods of

procurement set forth in 2 CFR § 200.320 (Methods of procurement to be followed). The recipient

shall maintain records sufficient to detail the history of each procurement transaction related to the

project. These records will include but are not necessarily limited to the rationale for the method of

procurement, selection of contract type, contractor selection or rejection, and the basis for

determining the contract price. See 2 CFR § 200.334 (Retention requirements for records).

(e) Contracting with Small and Minority Businesses, Women's Business Enterprises, and Labor

Surplus Area Firms. As set forth in 2 CFR § 200.321 (Contracting with small and minority businesses,

women's business enterprises, and labor surplus area firms), non-federal entities must take all

necessary affirmative steps to assure that minority businesses, women's business enterprises, and

labor surplus area firms are used when possible. See also the Terms and Conditions of the Award.

(f) Procurement of Recovered Materials. In accordance with 2 CFR § 200.323 (Procurement of

recovered materials), a recipient that is a state agency or agency of a political subdivision of a state

and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by

the Resource Conservation and Recovery Act (42 U.S.C. § 6962). The requirements of Section 6002

20 April 2021

102

include procuring only items designated in guidelines of the Environmental Protection Agency (EPA)

at 40 CFR Part 247 that contain the highest percentage of recovered materials practicable,

consistent with maintaining a satisfactory level of competition, where the purchase price of the item

exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded

$10,000; procuring solid waste management services in a manner that maximizes energy and

resource recovery; and establishing an affirmative procurement program for procurement of

recovered materials identified in the EPA guidelines.

(g) Contract Cost and Price. A recipient must adhere to the cost and contract pricing

requirements set forth in 2 CFR § 200.324 (Contract cost and price). In particular, a recipient must

perform a cost or price analysis in connection with every procurement action in excess of the

Simplified Acquisition Threshold (currently $250,000), including contract modifications.

(h) Bonding Requirements. For construction or facility improvement contracts or subcontracts

exceeding the Simplified Acquisition Threshold (currently $250,000), the bonding requirements set

forth in 2 CFR § 200.326 (Bonding requirements) shall apply.

(i) Required Contract Provisions. A recipient, including a State, must ensure that contracts and

subcontracts awarded pursuant to a DOC financial assistance award contain the applicable

provisions described in 2 CFR § 200.327 (Contract provisions) and in Appendix II to Part 200

(Contract Provisions for non-Federal Entity Contracts Under Federal Awards).

(j) Wage rate requirements. For construction projects administered by EDA or as otherwise

required by applicable program or appropriation legislation, wage rates paid for labor must not be

less than the prevailing area wages, as determined by the U.S. Secretary of Labor and embodied in

the construction contract pursuant to the requirements of the Davis-Bacon Act, as amended

(40 U.S.C. § 276a et seq.).

(13) Review of Plans and Specifications.

(a) Review Prior to Advertising. When required by the operating unit, the recipient must submit

plans, specifications, and certain related documents for review and concurrence prior to advertising

for bids. This review is to ensure compliance with the Terms and Conditions of the award and does

not attest to the accuracy or completeness of design, dimensions, details, proper selection of

materials, or compliance with required codes or ordinances, which responsibility rests with the

recipient. See also 2 CFR § 200.325(a), which specifies that the recipient must provide technical

specifications on proposed procurements where the Federal awarding agency believes such review

is needed to ensure that the item or service specified is the one being proposed for acquisition.

(b) Review Prior to Award. As provided in 2 CFR § 200.325(b), the operating unit may also

review proposed contracts and related procurement documents prior to award if:

(i) The procurement is expected to exceed the simplified acquisition threshold fixed at

41 U.S.C. 403(11) (currently set at $250,000), and is to be awarded without competition or only one

bid or offer is received in response to a solicitation;

20 April 2021

103

(ii) The procurement is more than the simplified acquisition threshold and is to be awarded to

other than the apparent low bidder under a sealed bid procurement;

(iii) The proposed contract modification changes the scope of the contract or increases the

contract amount by more than the simplified acquisition threshold;

(iv) The recipient’s procurement procedures and operations fail to comply with the

procurement standards set out in the award, or

(v) The procurement, which is expected to exceed the simplified acquisition threshold, specifies

a “brand name” product.

Until the operating unit has reviewed recipient’s proposed contracts and related procurement

documents and determined they comply with the Terms and Conditions, the recipient will proceed

at its own risk regarding the eligibility of any costs incurred.

(14) Alternate Construction Procurement Methods. If permitted by the terms and conditions of

an award, a Recipient may use alternate construction procurement methods to the traditional

design/bid/build procedures (including lump sum or unit price-type construction contracts). If an

alternate method is used, the recipient shall submit to the operating unit for approval a construction

services procurement plan. In this situation, the recipient must secure a design professional to

oversee the process.

(15) Protest Procedures. In accordance with 2 CFR § 200.318(k), the recipient is responsible,

without recourse to DOC, in accordance with good administrative practice and sound business

judgment, for the settlement and satisfaction of all contractual and administrative issues arising out

of a recipient’s procurement under a DOC financial assistance award. These issues include, but are

not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the

non-Federal entity of any contractual responsibilities under its contracts. The Federal awarding

agency will not substitute its judgment for that of the non-Federal entity unless the matter is

primarily a Federal concern. Violations of law will be referred to the local, state, or Federal authority

having proper jurisdiction.

F. Disbursement of Grant Funds and Financial Administration

Unless the award provides that payments will be made using the Department of Treasury’s

Automated Standard Application for Payment (ASAP) system or other automated payment system, after

the initial disbursement has been made, the recipient may request interim disbursements by submitting

Form SF-270 (Request For Advance Or Reimbursement) or Form SF-271 (Outlay Report And Request For

Reimbursement For Construction Programs) as required for reimbursing the operating unit’s share of

eligible project costs. When project construction is complete, the final inspection has been completed,

and the recipient has accepted the project from the contractor, the recipient can begin the closeout

process by submitting the following documentation for review and approval to the respective operating

unit:

20 April 2021

104

1. A request for final disbursement on an executed Form SF-270 or SF-271;

2. A certificate of substantial completion, final acceptance report, or similar documentation; and

Other documentation as may be required by the operating unit or other Federal authority.

G. Award Amendments

In most instances, proposed modifications must be accomplished only through a formal amendment

to the award. Types of amendments may include:

1. Time Schedule (No Cost) Extensions. The recipient is responsible for compliance with the

project development time schedule deadlines contained in the Financial Assistance Award. As soon as

the recipient becomes aware that it will not be possible to meet the time schedule, it immediately

should contact the operating unit to request a time extension. A time extension (no cost) must

ordinarily be submitted to the Federal project officer at least 30 days prior to the end date of the award.

A budget of the remaining funds should be included in the time extension request. The operating unit

may inform the recipient that grant disbursements cannot be made while the recipient is not in

compliance with the time schedule. The recipient’s notice to the operating unit should contain the

following information (as applicable to the subject award):

a. An explanation of the recipient’s inability to complete work by the specified date (e.g., a

lengthy period of unusual weather delayed the contractor’s ability to excavate the site; major re-

engineering required in order to obtain Federal or state approvals; unplanned environmental

mitigation required).

b. A statement that no other changes to the project are contemplated;

c. A budget for the remaining funds;

d. A statement, supported by documentation where appropriate, demonstrating there is still a

bona fide need for the project; and

e. A statement that no further delay is reasonably anticipated and that the project can be

completed within the revised time schedule.

2. Budget Revisions and Changes to Program Plans. The recipient shall notify the operating unit

and request prior approval of any proposed deviations from budget and program plans in accordance

with 2 CFR § 200.308 (Revision of budgets and program plans) and the Terms and Conditions of the

Award.

3. Additional Funding. In accepting an award from an operating unit, the recipient normally agrees

to fund any overrun(s). Additional funding for an approved project is subject to prior approval from the

Grants Officer. To be considered for approval, additional funding requests must compete with other

applications for program funding. If an overrun occurs as a result of the construction contract bid

20 April 2021

105

opening, before the operating unit will accept a formal request for additional funds, it will be necessary

for the recipient to furnish the following documentation to the operating unit:

a. A written statement from the recipient’s architect/engineer giving reasons for the

architect/engineer’s professional opinion that redesign of the project within the approved scope or

using new or additional deductive alternates cannot reasonably be expected to reduce the cost to

within the available funds; and

b. A written statement from the administrative head of the recipient’s organization justifying

why the recipient cannot furnish the additional funds required, why non-Federal sources of funds

cannot be secured, and, for EDA projects, certifying that the recipient’s effective taxing and/or

borrowing capacity have or has been exhausted.

The operating unit’s acceptance of a request for additional funding does not indicate approval. Any

further action by the recipient pending the operating unit’s review of the request is at the recipient’s

risk and at the risk of not being reimbursed by DOC, unless and until the request is approved by the

Grants Officer.

4. Enforcement and Termination.

a. Enforcement.

(1) If a recipient materially fails to comply with any Term or Condition of the award, whether

stated in a Federal statute, regulation, assurance, application for Federal financial assistance, or

notice of award, the operating unit may pursue all available rights and remedies available to it,

including those set out in 2 CFR § 200.339 (Remedies for noncompliance).

(2) Costs resulting from obligations incurred by the recipient after notice by the operating unit

of suspension or termination of the award are not allowable unless the operating unit expressly

authorizes them in the notice of suspension or intent to terminate, or subsequently. Other costs

incurred by the recipient during suspension or after termination that are necessary and not

reasonably avoidable are allowable if:

(a) The costs result from obligations that were properly incurred by the recipient before the

effective date of the suspension or termination, are not in anticipation of it, and in the case of

termination, are non-cancellable; and

(b) The costs would be allowable if the award was not suspended or expired normally at the

end of the budget period in which the termination takes effect.

(3) The remedies for noncompliance identified in 2 CFR § 200.339 (Remedies for

noncompliance), including suspension and termination, do not preclude the recipient from being

subject to debarment and suspension under Executive Orders 12549 and 12689 and the Department

of Commerce’s implementing regulations at 2 CFR Part 1326 (Non-Procurement Debarment and

Suspension).

20 April 2021

106

b. Termination.

(1) Terminations for a non-federal entity’s material failure to comply with the terms of the

award must be in accordance with 2 CFR §§ 200.340 (Termination), 200.341(b) and (c), and 200.342

(Opportunities to object, hearings and appeals), as applicable.

(2) Terminations with the consent of the non-Federal entity (also known as terminations by

mutual agreement) must comply with 2 CFR § 200.340 (Termination).

(3) Termination to the greatest extent authorized by law, if an award no longer effectuates the

program goals or agency priorities (2 CFR § 200.340 (a)(2)).

H. Post-Construction Requirements

1. Audit Requirements.

a. Certain recipients are subject to the audit requirements contained in Subpart F of 2 CFR Part

200 (Audit Requirements) – referred to in this Grants Manual as the Single Audit Requirements. The

Single Audit Requirements are issued pursuant to the Single Audit Act of 1984 (Pub. L. No. 98-502),

as amended by the Single Audit Act Amendments of 1996 (Pub. L. No. 104-156; 31 U.S.C. §§ 7501-

7507) and require that recipients that are nonprofit organizations, government agencies, Indian

tribes, and educational institutions expending Federal awards of $750,000 or more during the

recipient’s fiscal year conduct an audit in accordance with the requirements of Subpart F of 2 CFR

Part 200. If the recipient does not have a current audit performed in accordance with the Single

Audit Requirements, the operating unit shall advise the recipient of the need for submitting the

required audit and may also take appropriate enforcement action in accordance with 2 CFR §

200.339 (Remedies for noncompliance).

b. For profit and other organizations not subject to the Single Audit Requirements shall be

subject to the audit requirements set forth in Section F.01.b. of the DOC Financial Assistance

Standard Terms and Conditions (December 2014), unless a different audit requirement is imposed

through specific award condition(s).

c. The operating unit or the OIG may conduct audits of awards. The recipient will be notified in

advance if it is selected for an audit. The recipient must permit the operating unit, the Comptroller

General of the United States, the OIG, or any of their duly authorized representatives, access to any

paper or electronic documents, books, correspondence, and any records (that are pertinent to a

specific award to verify the recipient’s compliance with the Terms and Conditions of an award. See

2 CFR § 200.337 (Access to records).

2. Property Management.

a. Section E.2.a(2)(a) of this chapter provides that all DOC construction awards include a term

requiring that the recipient to agree that, for the estimated useful life of the facility funded with the

20 April 2021

107

award, the project will be properly and efficiently administered, operated and maintained, for the

purpose authorized by the award and in accordance with the Terms and Conditions of the award.

b. Estimated Useful Life. Unless the operating unit determines otherwise, the following ranges

of estimated useful lives are considered reasonable for the listed assets:

(1) New buildings, 20 – 40 years.

(2) Rehabilitation or outfitting of existing buildings, 15 – 20 years.

(3) Improvements other than buildings, 15 – 20 years.

The estimated useful life should be determined from the date of acquisition, date of certificate

of occupancy for building or improvement, filing of the notice of federal interest, or other

appropriate date as provided in the terms and conditions of an award FALD should be consulted to

the extent that a Grants Officer or Operating Unit has questions concerning the date upon which the

estimated useful life in a specific project or asset should commence.

c. Notice of Federal Interest. Section E.2.a.(2)(b) of this chapter provides that certain DOC

construction awards include a term requiring the recipient to file or record a covenant, mortgage, or

other statement of the operating unit’s interest in the property (the “Federal Interest”), acceptable

in form and substance to the operating unit, that must be placed of record in accordance with local

law, with continuances re-filed as appropriate (for fixture filings). The Federal Interest notice

provides public notice of that interest and helps to ensure compliance with matters such as the

purpose, scope, and use of a project; it should be reflected by a recorded notice in appropriate form

and substance (e.g., a mortgage, covenant, or other statement) setting forth the operating unit’s

interest in real property or other improvements in the case of a project involving the acquisition,

construction, or improvement of real property and/or buildings, signed by an authorized official of

the recipient. It should specify the estimated useful life of the property and should include but not

be limited to the use requirements applicable to the property and the procedure for disposition of

the property when it is no longer needed for the originally-authorized purpose. The notice of the

DOC operating unit’s interest must be recorded or filed in the real property records of the

jurisdiction in which the real property is located, in accordance with applicable law. In view of the

complexities and varying requirements for perfecting interests in real property from jurisdiction to

jurisdiction, the DOC requires a written statement from a licensed attorney in the jurisdiction where

the property is located, certifying that the Federal Interest has been protected as required under the

award and in accordance with this general policy. A copy of the recorded lien, statement, or other

recordable instrument must be attached to the attorney’s certification.

When the recipient’s executed certification and attached documentation is received by the

operating unit, the operating may want to consider consulting with other legal counsel within the

DOC (for example, FALD or EDA’s Office of Chief Counsel) who have experience in dealing with real

property construction grants, for assurance that the certification and attached documentation

reasonably appear to adequately protect the Federal Interest.

d. Type of Federal Interest. Operating units should consider the nature of the recipient and the

asset and the potential risk of loss to the government when determining the type of instrument that

20 April 2021

108

the recipient should be required to execute and record reflecting the Federal Interest therein. State

or local law may prescribe the form, means and location of filing or recording an appropriate notice.

Operating units are encouraged to consult with FALD counsel concerning the form and content of

recipient documentation and public filings.

3. Closeout Procedures.

a. After construction is complete and the project is closed out financially, the recipient has an

ongoing responsibility to properly operate and maintain the project for its estimated useful life in

accordance with its original purpose. The recipient also must comply with all applicable

requirements including but not limited to ongoing compliance with Federal statutes, regulations,

and Executive Orders prohibiting discrimination; applicable Federal laws prohibiting inherently

religious activity; applicable environmental law and performance measures; and maintaining records

to document such compliance which shall be made available for inspection by the operating unit or

other government officials as required. When project construction and final inspection have been

completed, and the recipient has accepted the project from the contractor, the recipient may begin

the closeout process in accordance with 2 CFR § 200.344 (Closeout) and the Terms and Conditions of

the Award. The recipient should furnish the following to the operating unit:

(1) Confirmation of compliance with all Terms and Conditions of the Award, including all

specific award conditions;

(2) All required financial and progress reports;

(3) A properly completed Form SF-429, including applicable attachments and supporting

documentation;

(4) Confirmation of appropriate insurance coverage for aboveground facilities in accordance

with 2 CFR § 200.310 (Insurance coverage) and the Terms and Conditions of the Award;

(5) Confirmation that all changes to the project have been brought to the attention of the

operating unit and approved as necessary by the Grants Officer;

(6) Confirmation that provisions have been made for the retention of records pertaining to the

award in accordance with the 2 CFR § 200.334 (Retention requirements for records) and the Terms

and Conditions of the Award;

(7) A copy of the executed Certificate of Final Completion, Certificate of Occupancy, or similar

documentation;

(8) Confirmation that as-built drawings have been received from the contractor or the

architect/engineer;

(9) Confirmation that a copy of the recipient’s currently valid audit under the Single Audit

Requirements has been submitted to the Federal Audit Clearinghouse and, if required, furnished to

the operating unit. If an audit under the Single Audit Requirements is required, but not available, the

recipient must submit a plan to secure the required audit to the operating unit. The recipient must

20 April 2021

109

advise the operating unit if an audit under the Single Audit Requirements is not required. If the

recipient is not subject to the Single Audit Requirements, the operating unit must confirm the

recipient has submitted all required project-specific audits;

(10) Confirmation that no Davis-Bacon (if applicable) or local labor employment violations exist;

(11) Notification of any change, lien, mortgage, or other encumbrance relating to the ownership

of the project;

(12) Notification of any unresolved contract/contractor disputes;

(13) Execution and recordation of a lien, mortgage, or covenant of purpose, use, and ownership

in favor of the operating unit, if this is required under the Terms and Conditions of the award and

has not already been accomplished; and

(14) Confirmation that the recipient will maintain project facilities for the estimated useful life

of the facility as determined by the operating unit, during which period the recipient may not

alienate its ownership or change the use and purpose of the assisted facility without prior written

approval of the Grants Officer;

b. Within 120 calendar days of project completion (which may be extended by the Grants

Officer upon written request by the recipient), the recipient shall submit all financial, performance,

and other reports as required by 2 CFR § 200.344 (Closeout) and by the Terms and Conditions of the

Award.

The subrecipient is required to submit its final performance report to the pass-through

entity within 90 calendar days unless an extension has been granted.

c. Unless the operating unit authorizes an extension, the recipient shall liquidate all obligations

incurred under the award no later than 120 calendar days after the acceptance of the project from

the contractor or before the end of the budget period, whichever occurs earlier, as specified in 2

CFR § 200.344 (Closeout) and in the Terms and Conditions of the Award.

d. At the Grants Officer discretion, the following documentation should accompany the

recipient’s final disbursement request when submitted to the operating unit, unless such

documentation has been previously furnished, as applicable:

(1) Copies of all executed contracts, subcontracts (if claimed separate from the prime contract),

contract change orders, vouchers, canceled checks, and other evidence of costs incurred necessary

to substantiate the costs claimed on the operating unit award;

(2) A copy of the recipient’s currently valid audit performed in accordance with the Single Audit

Requirements, if such an audit is required, and if the operating unit requires submission of the audit;

(3) Payroll forms, if any of the cost claimed is for work performed by the recipient’s in-house

work forces (“force account”);

(4) Title opinions, legal descriptions, bills of sale, title records, etc., for any land cost being

claimed; and

20 April 2021

110

(5) Specifics of any administrative costs being claimed.

e. In accordance with 2 CFR § 200.345 (Post-closeout adjustments and continuing

responsibilities), the closeout of an award does not affect any of the following:

(1) The right of the operating unit to disallow costs and recover funds on the basis of a later

audit or other project review;

(2) The obligation of the recipient to return any funds due as a result of later corrections or

other transactions;

(3) Property management, property disposition, and records retention requirements; and

(4) Audit requirements set forth in 2 CFR Part 200, Subpart F, and in the Terms and Conditions

of the Award.

20 April 2021

111

Appendix A: Applicable Regulations, OMB Circulars and Agency-specific Guidance

The following regulations, OMB Circulars, and forms are available from public libraries and may also be

accessed at the following internet websites:

• OMB (www.whitehouse.gov/omb/

), or

• The Government Printing Office Access site of the National Archives and Records Administration

(www.gpoaccess.gov/cfr/index.html

See also DOC ST&Cs and Chapter 2 of this manual for discussion of additional requirements, including,

but not limited to:

• National Environmental Policy Act of 1969, as amended (Pub. L. No. 91-190; 42 U.S.C. § 4321 et

seq., as implemented under 40 CFR Chapter V) (NEPA);

• Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000d et seq.) and the

Department’s implementing regulations at 15 C.F.R Part 8;

• 42 U.S.C. § 3123 and 42 U.S.C. § 6709 (for EDA recipients), and the Department’s implementing

regulations at 15 CFR §§ 8.7-8.15;

• Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794) and the

Department’s implementing regulations at 15 CFR Part 8b;

• The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.) and the Department’s

implementing regulations at 15 CFR Part 20;

• The Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) prohibiting discrimination

on the basis of disability under programs, activities, and services provided or made available by

State and local governments or instrumentalities or agencies thereto, as well as public or private

entities that provide public transportation;

• 2 CFR Part 1326 (Non-Procurement Debarment and Suspension);

• 15 CFR Part 11 (Uniform Relocation Assistance and Real Property Acquisition for Federal and

Federally-Assisted Programs);

• 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements

for Federal Awards, including the “Property Standards” set forth in 2 CFR §§ 200.310 (Insurance

coverage) – 200.316 (Property trust relationship));

• 36 CFR Part 800 (Protection of Historic Properties);

• 48 CFR Part 31 (Contract Cost Principles and Procedures);

• OMB Standard Form 424C (Budget Information – Construction Programs);

• OMB Standard Form 424D (Assurances – Construction Programs) which references laws and

regulations that may apply to particular awards;

• OMB Standard Form SF 428 (Tangible Personal Property Report) including Attachments A

through C;

• OMB Standard Form SF 429 (Real Property Status Report) including Attachments A through C;

and

• Davis Bacon Wage Rates, available at http://www.wdol.gov/

20 April 2021

112

1. The following is available from EDA:

• Public Works and Economic Development Act of 1965, as amended (42 U.S.C. § 3121 et seq.)

(PWEDA)

• EDA regulations set forth at 13 CFR Parts 300 through 315

• EDA Standard Terms and Conditions for Construction project

• The Summary of EDA Construction Standards (with Exhibits)

• For the most current and up-to-date versions of the following Exhibits, contact EDA’s –

Office of the Chief Counsel

HCHB, Room 72023

(202) 482-4687

[email protected]v, [email protected], or rgamble@eda.gov

(a) Exhibit A – Sample Mortgage Cover Letter

(b) Exhibit B – Sample Mortgage

(d) Exhibit D – Sample Covenant

2. The following are available from NOAA.

• NOAA(Construction) Grants Policy Directive

• NOAA Grants Standard Operating Procedures – Construction Grants

20 April 2021

113

17. GUIDELINES FOR THE PREPARATION OF PUBLIC NOTICES ANNOUNCING THE

AVAILABILITY OF FINANCIAL ASSISTANCE: NOTICE OF FUNDING OPPORTUNITY

(NOFO) AND FEDERAL REGISTER NOTICES

A. Background

1. 2 CFR § 200.204 (Notices of funding opportunities) and Appendix 1 to 2 CFR Part 200 (Full text of

notice of funding opportunity) contain the current requirements for NOFOs.

2. It is the policy of the Department that:

a. All NOFOs will conform to the formats set forth in the guidance mentioned above and

summarized below.

b. All NOFOs are required to be cleared in accordance with established internal clearance

procedures as well as applicable external clearance procedures (i.e. OMB clearance as required).

c. All NOFOs will be posted on the OMB-designated governmentwide Web site for finding and

applying for Federal financial assistance; the current site is http://www.grants.gov/

d. All amendments to NOFOs must undergo the same clearance protocol as the original NOFO.

[Note: any changes to a competition’s substantive application requirements, including but not

limited to eligibility requirements, required forms, change of dates, and the evaluation criteria,

requires an amendment to the NOFO. Bureaus may not change information concerning a

competition’s substantive application requirements in a Frequently Asked Question (FAQ)

document without also amending the NOFO.

Questions pertaining to whether a NOFO amendment is required should be addressed to the

DOC Financial Assistance Policy and Oversight Division and/or the Grants Officer responsible for

the subject financial assistance program, in consultation with the Federal Assistance Law

Division (FALD).]

e. Publication of Supplementary Materials. Bureaus often produce webinars, FAQ documents,

and other supplementary materials to provide additional guidance to potential financial assistance

applicants, during the time a NOFO is open for applications. Supplementary materials, including

FAQs or other informal clarifications external to the NOFO itself, should not be published while the

competition is in process without first consulting the Grants Officer and FALD. This applies to any

materials related to the competition that the relevant bureau decides to make public via webinars,

program web pages, printed handouts, or any other vehicle.

f. Further, for any supplementary materials published while a NOFO is open to applications,

the issuing bureau must:

(1) Require that the supplementary materials be accompanied by a disclaimer stating that the

NOFO is the official competition document – nothing in the supplementary materials are

intended to conflict with or supersede the NOFO in any way; and

20 April 2021

114

(2) Resolve any perceived conflicts by reference to the NOFO.

g. Should an operating unit determine that it will also publish a notice in the Federal Register,

only the minimum information legally required under the Administrative Procedure Act (5 U.S.C. §§

551-559) will be published, as described in Sections C. and D., below.

B. Format of NOFO

The format has two parts, the first part provides summary information (see 2 CFR § 200.204, Notices

of funding opportunities) and the second part includes the full text of the announcement (see Appendix

1 to 2 CFR Part 200).

1. For discretionary grants and cooperative agreements that are competed, the Federal

awarding agency must announce specific funding opportunities by providing the following

information in a public notice.

a. Summary information in notices of funding opportunities. The operating unit must display

the following information posted on the OMB-designated governmentwide website for funding and

applying for Federal financial assistance, in a location preceding the full text of the announcement:

(1) Federal Awarding Agency Name(s) [Required]. Include the name of the Department, the

operating unit and the specific office(s) within the unit (e.g., bureau, directorate, division, or

institute) that are involved in the funding opportunity.

(2) Funding Opportunity Title [Required]. If there is a program name (within the broader title)

that is different from the Funding Opportunity Title, include that name here.

(3) Announcement Type [Required]. Indicate whether this is the initial announcement of this

funding opportunity or a modification of a previously announced opportunity. If it modifies a

previous announcement, provide the date of that announcement and identify the portions that are

being modified. A modification does not need to include all of the sections of the full

announcement text, only those sections being amended.

(4) Funding Opportunity Number [Required, if applicable]. An operating unit may assign unique

numbers to, for example, identify specific competitions or programs. If a number is assigned,

include it. If it modifies a previous announcement, provide the number of that announcement.

(5) Assistance Listings Number(s) [Required]. The program name identified in the Assistance

Listings may be given along with the assistance listing number. Assistance Listings numbers often

include more than one program. Each program within an assistance listing number must include

additional numbers assigned only to that program, so that it can be distinguished from other

programs listed under the same assistance listing number.

(6) Key Dates [Required]. Include key dates that potential applicants need to know. Key dates

include due dates for applications or Executive Order 12372 submissions, as well as any letters of

20 April 2021

115

intent or pre-applications. For any announcement issued before a program's application materials

are available, this section must also include the date on which those materials will be released.

(7) Optional, Additional Summary Content. Following the required overview information

described above, the operating unit may present other information. Present any optional overview

information in a sequential order that parallels the organization of the full text of the

announcement. Examples of overview information that could help potential applicants decide

whether to read the full announcement are: a concise description of the funding opportunity, the

total amount to be awarded, the anticipated amounts and/or numbers of individual awards, the

types of instruments that may be awarded, who is eligible to apply, whether cost sharing is required,

and any limitations on the numbers of applications that each applicant may submit. Other

information that could later help applicants more readily find what they need (e.g., where one can

get application materials) may also be included.

b. Availability period. The operating unit must generally make all funding opportunities

available for application for at least 60 calendar days. The operating unit may make a determination

to have a less than 60 calendar day availability period but no funding opportunity should be

available for less than 30 calendar days unless exigent circumstances require as determined by the

Federal awarding agency head or delegate.

2. Full Text of Announcement.

The full text of the announcement is organized in sections. The format indicates immediately

following the title of each section whether that section is required in every announcement or is optional.

The format is designed so that similar types of information will appear in the same sections in

announcements of different Federal funding opportunities. Toward that end, there is text in each of the

format's sections to describe the types of information to be included in that section of an actual

announcement.

If an operating unit intends to include information on a subject that the format does not specifically

discuss, address that subject in whatever section(s) is most appropriate. For example, if an operating

unit chooses to address performance goals in the announcement, it might do so in the funding

opportunity description, the application content, and/or the reporting requirements.

Similarly, when this format calls for a type of information to be in one particular section, an

operating unit intending to address that subject in other sections must use cross-references between

the sections (there must be hyperlinks for cross-references in any electronic versions of the

announcement).

See Appendix 1 to 2 CFR Part 200 for the sections required in the full text of the announcement.

Additionally, the following information must also be included in the identified sections of the full text of

all DOC announcements:

a. In Section D.6 (Funding Restrictions), the applicant must be advised that it is DOC policy that

DOC funds may not be used to pay for management fees in excess of costs or profits, unless

statutorily authorized.

20 April 2021

116

[Note: Per Chapter 9 of this Manual, requests for fee or profit by recipients of any type should

be referred to FALD for review.]

b. In Section H (Other Information) – this section must include the following two items:

(1) Alert applicants to the need to identify proprietary information and inform them about the

way the operating unit will handle it. The following language shall be included in all NOFOs:

The applicant acknowledges and understands that information and data contained in

applications for financial assistance, as well as information and data contained in financial,

performance and other reports submitted by applicants, may be used by the Department of

Commerce in conducting reviews and evaluations of its financial assistance programs. For this

purpose, applicant information and data may be accessed, reviewed and evaluated by

Department of Commerce employees, other Federal employees, and also by Federal agents and

contractors, and/or by non-Federal personnel, all of whom enter into appropriate conflict of

interest and confidentiality agreements covering the use of such information. As may be

provided in the terms and conditions of a specific financial assistance award, applicants are

expected to support program reviews and evaluations by submitting required financial and

performance information and data in an accurate and timely manner, and by cooperating with

Department of Commerce and external program evaluators. In accordance with 2 C.F.R. §

200.303(e), applicants are reminded that they must take reasonable measures to safeguard

protected personally identifiable information and other confidential or sensitive personal or

business information created or obtained in connection with a Department of Commerce

financial assistance award.

In addition, Department of Commerce regulations implementing the Freedom of Information

Act (FOIA), 5 U.S.C. Sec. 552, are found at 15 C.F.R. Part 4, Public Information. These regulations

set forth rules for the Department regarding making requested materials, information, and

records publicly available under the FOIA. Applications submitted in response to this Notice of

Funding Opportunity may be subject to requests for release under the Act. In the event that an

application contains information or data that the applicant deems to be confidential commercial

information that should be exempt from disclosure under FOIA, that information should be

identified, bracketed, and marked as Privileged, Confidential, Commercial or Financial

Information. In accordance with 15 CFR § 4.9, the Department of Commerce will protect from

disclosure confidential business information contained in financial assistance applications and

other documentation provided by applicants to the extent permitted by law.

(2) Include certain routine notices to applicants (e.g., that the Government is not obligated to

make any award as a result of the announcement or that only grants officers can bind the

Government to the expenditure of funds).

C. Publication in the Federal Register

Grants.gov is the current OMB-designated governmentwide Web site for posting, finding and

applying for Federal financial assistance. In a 29 November, 2010 memorandum, AGC/L&R, after

consultation with FALD, determined that Notices of Funding Availability (NOFAs) and other similar

20 April 2021

117

notices soliciting proposals for grants and cooperative agreements need only be forwarded to AGC/L&R

when funding is to exceed $100 million or if the announcement is for a new grant program. Operating

units are no longer required to publish NOFAs in the Federal Register unless required by statute or

regulation. Operating units may want to seek legal counsel from AGC/L&R or FALD regarding the

decision not to publish a notice in the Federal Register. Should an operating unit determine that it will

also publish a notice in the Federal Register, Department policy is that the operating unit will publish

only the minimum information legally required under the Administrative Procedure Act (5 U.S.C. §§ 551-

559), which includes the following information contained in the notice of funding opportunity:

1. Summary description of the program;

2. Deadline dates;

3. Addresses for submission of applications;

4. Information contacts (including electronic access);

5. Amount of funding available;

6. Statutory authority;

7. Assistance Listings number;

8. Eligibility requirements, including any cost sharing or matching requirements;

9. Intergovernmental Review requirements;

10. Evaluation criteria used by the merit reviewers;

11. Selection procedures, including funding priorities/selection factors/policy factors to be applied

by the selecting official; and

12. Administrative and National Policy Requirements. See paragraph E.2.g.(9), below, for specific

language.

To the extent any of the above have been codified or otherwise published in the Federal Register a

cross reference to the appropriate CFR or Federal Register publication may be substituted.

D. Federal Register Format Requirements

Federal Register notices must be drafted in accordance with the guidelines delineated in the Federal

with the handbook, notices must be organized as follows:

1. Heading. The headings must identify the billing code, issuing agency, the CFR title, docket

number, regulation identification number (RIN) (if applicable) and subject matter of the document and

must be presented in the following format:

20 April 2021

118

a. Agency is always the Department of Commerce.

b. Subagency (if necessary) identifies the operating unit which is issuing the notice.

c. Docket number.

d. RIN (if applicable).

e. Subject heading describes the content of the notice in a concise statement.

The following is an example of how the headings must appear in the notice:

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

[Docket No. ______]

RIN ________

Financial Assistance for Oyster Disease Research

2. Preamble. The preamble is the main focus of the notice and shall follow the Subject Heading. It

arranges the content of the document into a uniform format by providing information on “who, what,

where, when, and why.” This allows the reader to review the document and assess its main points,

determine whether it is of interest, and decide whether to respond to the notice. The preamble should

be organized in the following format with the captions typed in all capital letters:

a. AGENCY. Identifies the operating unit issuing the document. The caption usually repeats

the name of the operating unit as carried in the document's headings. When a subagency and

operating unit name appear together, the subagency name is carried first and the agency name is

represented by its commonly used acronym or other shortened expression (for example, Economic

Development Administration, DOC). This caption may, in addition, identify a smaller organizational

unit within the operating unit (for example, National Marine Fisheries Service, NOAA).

b. ACTION. Identifies the document category. This section must not be used to summarize the

document. In this instance, the document category is a “Notice.”

c. SUMMARY. Briefly describes in plain English what action is being taken, why the action is

necessary, and the intended effect of the action. Any extensive discussion or details belongs under

the SUPPLEMENTARY INFORMATION section.

d. DATES. Contains any pertinent dates that the reader may need to know such as the closing

dates for submission of preapplications (if applicable) and applications, anticipated number of days

required to process applications, and date when awards are expected to be made. To provide the

public reasonable notice and an opportunity to apply, the Federal awarding agency must generally

make all funding opportunities available for application for at least 60 calendar days. See 2 CFR §

200.204 (Notices of funding opportunities).

20 April 2021

119

[Note: Because the publication date of the notice will not be known until it is submitted to the

Office of Federal Register, inserting specific calendar dates is discouraged; rather, allow the Office of

Federal Register to calculate the dates by including the following where dates must appear in the

notice: {Insert (number of days, but no less than 60) after the date of publication in the Federal

e. ADDRESSES. Contains pertinent address(es) for the reader such as where to write to obtain

an application package, where to send an application, or where to send correspondence for any

other purpose.

f. FOR FURTHER INFORMATION CONTACT. Contains the name and telephone number of a

person within the operating unit who can answer questions about the notice.

g. SUPPLEMENTARY INFORMATION. Contains detailed narrative information about the notice.

Remember, as is illustrated in item (9), below, to the extent any of the following items have been

codified or otherwise published in the Federal Register a cross reference to the appropriate CFR or

Federal Register publication may be substituted. At a minimum, the following items must be

included in this section:

(1) Authority. The statutory authority, EO, or any other legal authority that authorizes the

program to provide financial assistance.

(2) Assistance Listings. The assistance listing number(s) and program title(s).

(3) Program Description. A concise description of the goals and objectives of the program. The

description must explain why Federal assistance is being provided, the intended beneficiaries of

funded projects, and expected project results/ achievements.

(4) Funding Availability. The amount of funds available, expected amount of individual awards,

and the purposes for which funds may be spent. If the publication of the notice precedes the

passage of the appropriate fiscal year funding legislation, the announcement must state an

approximate amount and that funds will be contingent upon availability of funding.

(5) Eligibility Criteria. An explicit description of who is eligible to apply (e.g., States, universities,

non-profit organizations, for-profit organizations, individuals, etc.), including any limitations

imposed by the funding operating unit. Include here whether any cost sharing or matching is

required to receive an award.

(6) Evaluation Criteria. The evaluation criteria that will be used in evaluating and selecting

applications for discretionary funding consideration must be delineated. The criteria must be as

specific as possible and the relative weight of each criterion must be given. If each criterion is of

equal weight, the notice must so state. The criteria must provide an adequate basis for a review

panel to review an applicant's capabilities and assess its likelihood of successfully performing under

the award. Evaluation criteria must address such areas as adequacy of project plans, potential

contribution to program objectives, key personnel qualifications, capabilities of the applicant

organization, proposed costs, etc.

20 April 2021

120

(7) Selection Procedures. Describe the process and procedures by which recommended

applications will be selected. If the operating unit plans to select projects based upon funding

priorities/selection factors/policy factors, those must be stated and an explanation must be

provided as to how they will be applied to select projects out of the rank order established under

the merit evaluations.

(8) Intergovernmental Review. [Insert applicable statement below]

(a) Applications under this program are subject to Executive Order (EO) 12372

(Intergovernmental Review of Federal Programs).

(b) Applications under this program are not subject to Executive Order (EO) 12372

(Intergovernmental Review of Federal Programs).

[Note: The Office of Legislative and Intergovernmental Affairs (OLIA) has the responsibility for

implementing EO 12372.]

(9) Administrative and National Policy Requirements. This section must read as follows:

“Department of Commerce Pre-Award Notifications for Grants and Cooperative Agreements, which

are contained in the Federal Register Notice of 26 December 2014 (79 FR 78390), are applicable to

this solicitation.”

(10) Administrative Procedure Act and Regulatory Flexibility Act. Prior notice and comment

are not required under 5 U.S.C. Section 553, or any other law, for rules relating to public property,

loans, grants, benefits or contracts (5 U.S.C. Section 553(a)). Because prior notice and an

opportunity for public comment are not required pursuant to 5 U.S.C. Section 553 or any other law,

the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. et seq.) are inapplicable.

Therefore, a regulatory flexibility analysis is not required and has not been prepared.

(11) The Supplementary Information must also address EO 13132 (Federalism) and EO 12866

(Regulatory Planning and Review).

(12) Information Collection. Notwithstanding any other provisions of law, no person is

required to respond to, nor shall any person be subject to a penalty for failure to comply with a

collection of information, subject to the requirements of the Paperwork Reduction Act, unless that

collection displays a current valid OMB control number.

3. Signature. The signature of the person authorized to sign a notice submitted for publication in

the Federal Register must be placed at the end of the document. The signature must be handwritten in

ink, and the name and title of the person signing must be typed directly beneath the signature.

20 April 2021

121

E. Coordination and Clearance

1. Operating units are responsible for obtaining clearances of proposed NOFOs before they are

posted. Those NOFOs with funding that exceeds $100 million and announcements for new grant

programs will be forwarded by FALD to AGC/L&R so that AGC/L&R may coordinate the review and

clearance of those announcements with OMB. FALD is the final Departmental clearance authority.

Proposed NOFOs must be cleared by the Grants Officer, or designate, and the Grants Officer or

designate’s clearance and/or comments must be provided to FALD before FALD will clear a NOFO.

2. Operating units are responsible for processing and coordinating the clearance of all Federal

within the Office of Information Technology Policy and Planning, AGC/L&R, and FALD for comment

and/or clearance. Once all comments have been reconciled, and clearances received from OAM and the

Electronic Government Team, operating units must submit the notice to FALD for final Departmental

clearance. Once FALD provides its clearance, the operating unit must upload the notice into the

Department’s Regulatory Tracking System (RTS), which is the primary tracking system for all notices and

regulations. AGC/L&R will approve the notice submitted through RTS and issue a docket number, which

authorizes publication in the Federal Register. After issuance of the docket number by AGC/L&R, the

operating unit is responsible for submitting the notice to the Office of the Federal Register for

publication and to Congress and the General Accounting Office (GAO), as required by 5 U.S.C. 801 et seq.

20 April 2021

122

18. MULTI-YEAR FUNDING PROCEDURES

A. General

This chapter prescribes policies for incrementally funding multi-year awards when full funding of the

complete period of performance is not available at the beginning of the period of performance. Multi-

year funding allows Federal funds for a multi-year award to be provided in increments or by allotment,

usually on an annual basis.

B. Multi-Year Awards

Multi-year awards are awards which have a period of performance of more than 12 months of

activity. Multi-year awards are partially funded when the awards are approved and are subsequently

funded in increments. The Department encourages long-range program planning for the award and

administration of financial assistance actions. One mechanism for facilitating this goal is funding

through multi-year awards. This particularly pertains to awards that support research projects that may

span several years. One of the purposes of multi-year awards is to reduce the administrative burden on

both the applicant and the operating unit. For example, with proper planning, one application can

suffice for the entire multi-year award period. It is the Department’s policy that the period of activity of

multi-year awards should not exceed five years. Grants Officers should establish additional internal

policies for consistent selection and approval of programs and awards that may be funded under these

multi-year funding procedures.

C. Multi-Year Funding Principles

1. Reliability and Predictability. Multi-year funding may be considered for programs or long-term

awards where funding for the subsequent year(s) is anticipated but not provided at the time the award

is approved and where the estimated budget for future budget periods can be forecast with some

degree of reliability. These procedures should not be used for programs or long-term awards where the

funding allocation may substantially change (either increase or decrease) from initial projections. Multi-

year funding is provided by adding allotments of funds, usually on an annual basis, to extend the budget

period within the previously approved period of performance.

2. Competition. Recipients of multi-year awards should be selected after full and open

competition. However, projects under multi-year funding awards do not re-compete each year even

though the awards may be funded annually. At the outset the Grants Officer would approve the award

for a period of performance of more than one year (typically three to five years), and continuation

amendments to add funding and extend the budget period (or add budget periods if time limited funds)

are later approved with less administrative processing by the recipient, the Program Office, and the

Grants Office. This feature – competing only once for a multi-year period of support – permits the

grantee and the operating unit to more reliably plan for future years. The allotment of funding on an

annual basis preserves the ability of the operating unit to discontinue support at points during the

period of performance if funding is unavailable or the government's interest otherwise requires it.

3. Request for Applications. Program Offices must clearly identify in their NOFO when multi-year

funding is available under the program. The NOFO must clearly state that funding for each year's

activity is contingent upon the availability of funds, satisfactory performance, and is at the sole

discretion of the agency. The NOFO should solicit applications covering the entire multi-year period and

20 April 2021

123

must identify the amount currently available as well as the amounts projected to be available in the

future. Instructions for applying for a multi-year award must be contained in the NOFO.

4. Exceptions. Not all programs or awards are good candidates for multi-year funding. Grants

Officers must exercise good judgment in determining when to approve multi-year awards. Multi-year

funding is not appropriate and a fully funded award must be used in the following circumstances:

a. The project is exclusively for construction, alterations or renovations, or acquisition of

property;

b. At the time of award, the total period of DOC support for the project is planned to be less

than 24 months. Agencies may apply multi-year procedures to incremental funding for time periods

less than a year only if warranted due to program requirements and funding availability. Sufficient

justification should be provided to the Grants Officer for this exception to be considered for

approval.

5. Duration of Awards. The initial budget period and subsequent continuation amendments

extending the budget period should usually be for 12 months but the initial budget period may vary

from 12 months in order to provide for the continuation of the budget period at an advantageous date,

such as the end of the grantee's fiscal year or to coincide with phases of the project contained in the

proposal and budget. The applicant has more flexibility in carrying over funds throughout the entire

period of performance when no-year appropriations are used to fund the award.

6. Amendments. The commitment to obligate the amount of available funding for subsequent

budget periods with continuation amendments shall be clearly conditioned upon the availability of

funds, satisfactory progress by the grantee and the Program Office’s determination that continued

funding is in the best interest of the government.

a. An amendment to obligate prospective funding available shall be made on Form CD-451

(Amendment to Financial Assistance Award) prior to the expiration of each budget period. The

Grants Officer shall execute the amendment after recommendation by the Program Officer that the

performance under the current budget period is satisfactory, and funds are available. The Program

Officer should submit to the Grants Officer any continuation application with budget revisions, if

applicable. A documented recommendation and certification of funding availability should be

submitted at least 30 days prior to the expiration of the budget period.

b. The recipient should submit an amended application to the Program Officer for review and

recommendation to the Grants Officer for approval before the end of the current budget period if

the upcoming budget period will have a change in the scope of work or an increase in the funding

level from that which was last approved. Otherwise, there is generally no requirement for the

recipient to submit subsequent full applications under a multi-year period of performance.

c. Unobligated balances will automatically be carried over upon the continuation of the budget

period. For unobligated balances, the SF-425 (Federal Financial Report) will be used as the basis for

determining if there is any unobligated balance to be carried over at the end of the current budget

period.

20 April 2021

124

d. It is important to distinguish clearly between (1) stopping support of a project by not

continuing the budget period with continuation amendments, and (2) termination of a grant. A

grant gives the recipient legal authority to expend the funds awarded. The Department must give

recipients due process prior to terminating a grant for violation of its terms. Except where required

by statute, recipients have no right to a formal appeal process when a continuation is denied

because neither the grant approval nor extension of a budget period or period of performance gives

the recipient any legal entitlement to receive additional funds. Awards with multi-year funding will

generally be funded in allotments adding to or continuing the budget period. The new award

document (Form CD-450) initially obligates only the first allotment of funds.

D. Preparation of New Award

Following are instructions for the preparation of Form CD-450 (Financial Assistance Award) and

specific award conditions for awards with multi-year funding.

1. The CD-450 for a multi-year award should be prepared as reflected in the guidelines and

procedures described below:

a. The total amount of funding shown in the upper right-hand corner of the Form CD-450

should reflect the amount, both Federal and non-Federal that is currently available for obligation.

For example, a multi-year award with a total three (3) year budget of $3,900,000 (three equal

annual increments of $1,000,000 as the Federal share of cost and $300,000 as the recipient share of

cost) will show the portion of Federal funding that is currently available for obligation ($1,000,000)

and at least the corresponding portion of the non-Federal amount.

b. The period of performance should reflect the entire multi-year period during which Federal

sponsorship begins and ends.

c. In order to make it clear that future support is anticipated, the following should be included

in the specific award conditions:

The period of performance and budget(s) incorporated into this award cover a ____-year period for a

total amount of $__________ in Federal funds. However, Federal funding available at this time is

limited to $______________. Receipt of any prospective funding is contingent upon the availability

of funds from Congress, program authority, satisfactory performance, compliance with terms and

conditions of the Federal award, continued relevance to program objectives and will be at the sole

discretion of the Department of Commerce. The Department of Commerce is not liable for any

obligations, expenditures, or commitments which involve any amount in excess of the Federal

amount presently available. The recipient will be responsible for any and all termination costs it may

incur should prospective funding not become available. No legal liability will exist or result on the

part of the Federal Government for payment of any portion of the remaining funds which have not

been made available under the award. Notifications affecting funding or notice of non-availability of

additional funding for prospective years will be made only by the Grants Officer. The amendment to

obligate prospective funding available shall be made on Form CD-451 (Amendment to Financial

Assistance Award) if possible, prior to the expiration of each year's activities.

The period of performance for this action is _________ through ___________.

[NOTE: Funds are available for obligation from the beginning of the award through the end of the

budget period. With each year’s amendment to add funds, the budget period is EXTENDED from the

20 April 2021

125

date of award, so that by the last year of the award, for example, the 5-year period of performance

equals the 5-year budget period.]

2. An itemized budget must be incorporated into the award which includes the Federal and

non-Federal share of funding that is currently available.

E. Preparation of Amendment(s)

Following are instructions for the preparation of amendments for awards with multi-year funding.

1. As prospective funding becomes available for extended budget periods, the Grants Officer shall

notify the recipient by using the Form CD-451 (Amendment to Financial Assistance Award) of the

obligation of prospective funding. This should be done prior to the expiration of the current approved

budget period.

2. Form CD-451 should be prepared as follows:

a. The amendment provides $_________ in Federal funds for the continued funding of this multi-

year award for a total of $________. The amount to be entered into the "Previous Estimated Cost"

column should be the aggregate amount that has been obligated under the award. The amount to be

entered into the "Add" column is the amount which is being obligated with this action. In addition, the

following terms shall be included in the specific award conditions:

This amendment provides $ _________in Federal funding for the continued funding of this multi-year

award for a total of $ ___________. Any commitments, obligations, or expenditures in excess of that

amount of Federal funds will be made at the recipient’s risk. The funding period for this amendment is

extended through (date). Future funding is contingent upon the availability of funds, satisfactory

performance on the current and/or previous award, continued relevance to program objectives, and is at

the sole discretion of the Department of Commerce.

b. Work to be performed with this funding should correspond to that identified in the original

application and proposal, with any approved revisions. The original application, proposal, and any

approved revisions will be incorporated into the award by reference in this amendment.

3. If the work to be performed with the prospective funding does not correspond to that identified

in the original application, along with the proposal and any approved revisions, the recipient should

submit a request for approval of any revisions to the last approved budget and work to be performed.

This request should be submitted to the Program Officer for approval by the Grants Officer. It should be

noted that any revision to the work to be performed should not change the basic scope of work

originally approved. Changes to the approved scope of work must be incorporated into an award by the

Grants Officer in a formal amendment.

4. In the event that funding does not become available or the determination is made not to

provide additional funding for prospective year's activities, the Grants Officer shall notify the recipient in

writing prior to the expiration of the current budget period.

5. While the Department reserves the right not to provide all or a portion of a prospective year’s

funding, every effort should be made to minimize changes to the originally approved funding levels.

a. If funding levels increase over the amount stipulated in the specific award condition(s), the

recipient must submit a supplemental application for the amount of the increase along with a new

budget and required certifications. [Caution: A significant increase in funding may lead to an

unauthorized change in the scope of work.]

20 April 2021

126

b. If funding levels are significantly decreased, the recipient must submit a request for budget

revision to the Program Officer. [Caution: A significant decrease in funding could lead to an

unauthorized change in the scope of work.] The Program Officer will review the request and make

written notification to the Grants Officer who will notify the recipient of the Department’s approval

or disapproval. If the Grants Officer approves the revised (decreased) budget, Form CD-451 shall be

issued.